Gore Company, organized on January 2, 2009, had pretax accounting income of $7,000,000 and taxable income of $10,000,000 for the year ended December 31, 2009. The 2009 tax rate was 40%. The only difference between book and taxable income is estimated warranty costs. Expected payments and scheduled enacted tax rates are as follows:
Required:
Prepare one compound journal entry to record Gore's provision for taxes for the year 2009.
$$\begin{array} { r r r }
2010 & \$ 1,000,000 & 35 \% \
2011 & 500,000 & 35 \% \
2012 & 500,000 & 35 \% \
2013 & 1,000,000 & 30 \%
\end{array}$$

Question

Gore Company, organized on January 2, 2009, had pretax accounting income of $7,000,000 and taxable income of $10,000,000 for the year ended December 31, 2009. The 2009 tax rate was 40%. The only difference between book and taxable income is estimated warranty costs. Expected payments and scheduled enacted tax rates are as follows:
Required:
Prepare one compound journal entry to record Gore's provision for taxes for the year 2009.
 $$\begin{array} { r r r } 
2010 & \$ 1,000,000 & 35 \% \
2011 & 500,000 & 35 \% \
2012 & 500,000 & 35 \% \
2013 & 1,000,000 & 30 \%
\end{array}$$

Quizplus · Accepted Answer

The Answer of Gore Company, organized on January 2, 2009, had pretax accounting income of $7,000,000 and taxable income of $10,000,000 for the year ended December 31, 2009. The 2009 tax rate was 40%. The only difference between book and taxable income is estimated warranty costs. Expected payments and scheduled enacted tax rates are as follows:
Required:
Prepare one compound journal entry to record Gore's provision for taxes for the year 2009.
 $$\begin{array} { r r r } 
2010 & \$ 1,000,000 & 35 \% \
2011 & 500,000 & 35 \% \
2012 & 500,000 & 35 \% \
2013 & 1,000,000 & 30 \%
\end{array}$$