Future income taxes Nevada Corp., at the end of 2014, its first year of operations, prepared a reconciliation between pre-tax accounting income and taxable income as follows: Estimated warranty expenses of $530,000 will be deductible in 2015, $200,000 in 2016, and $70,000 in 2017.The use of the depreciable assets will result in taxable amounts of $200,000 in each of the next three years. The enacted tax rate is 30% and is not expected to change. Instructions
a.Prepare a schedule of the future taxable and deductible amounts.
b.Prepare the required adjusting journal entries to record income taxes for 2014.

Question

Future income taxes Nevada Corp., at the end of 2014, its first year of operations, prepared a reconciliation between pre-tax accounting income and taxable income as follows:  Estimated warranty expenses of $530,000 will be deductible in 2015, $200,000 in 2016, and $70,000 in 2017.The use of the depreciable assets will result in taxable amounts of $200,000 in each of the next three years. The enacted tax rate is 30% and is not expected to change. Instructions 
a.Prepare a schedule of the future taxable and deductible amounts.
b.Prepare the required adjusting journal entries to record income taxes for 2014.

Quizplus · Accepted Answer

The Answer of Future income taxes Nevada Corp., at the end of 2014, its first year of operations, prepared a reconciliation between pre-tax accounting income and taxable income as follows:  Estimated warranty expenses of $530,000 will be deductible in 2015, $200,000 in 2016, and $70,000 in 2017.The use of the depreciable assets will result in taxable amounts of $200,000 in each of the next three years. The enacted tax rate is 30% and is not expected to change. Instructions 
a.Prepare a schedule of the future taxable and deductible amounts.
b.Prepare the required adjusting journal entries to record income taxes for 2014.

Future Income Taxes Nevada Corp