Question

Question 15 Taxable income and preta financial income would be computations have been prepared til for Grouper Co. except for its treatments of gross profit on installment Sales and estimated costs of warranties. The following income 2016 2017 2018 Taxable income Excess of revenues over expenses (excluding two temporary Terences) Installment gross profit collected Expenditures for warranties Taxable income 5166,000 7,500 (4,800) $168,700 200.000 7.500 92.900 7.500 (4,800 ) $205,700 (4.800) 995,600 2016 2017 2018 Pretax financial income Excess of revenues over expenses (excluding two temporary differences) Installment gross profit recognized Estimated cost of warranties Income before taxes $203,000 $92,900 $166,000 22,500 (14,400) $174,100 $200,000 $92.900 The tax rates in effect are 2016, 404, 2017 and 2018, 45%. Al tax rates were enacted into low on January 1, 2016. No deferred income taxes existed at the beginning of 2016. Taxable income is expected in a future years Prepare the journal entry to record income tax expense, deferred Income taxes, and income taxes payable for 2016, 2017, and 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) I 2000-2012 W r ons. Inc. All Rights Reserved. A Din of W . San. In

Answer 1

Solution:

Bramble Co.
Journal Entries
Date	Particulars	Debit	Credit
31-Dec-16	Income tax expense Dr	$69,910.00
	Deferred Tax Assets Dr ($9,600*45%)	$4,320.00
	To Income Tax Payable		$67,480.00
	To Deferred tax liability ($15,000*45%)		$6,750.00
	(Being current income tax and deferred taxes)
31-Dec-17	Income tax expense Dr	$91,350.00
	Deferred Tax Liability Dr ($7,500*45%)	$3,375.00
	To Income Tax Payable		$92,565.00
	To Deferred tax Assets ($4,800*45%)		$2,160.00
	(Being current income tax and deferred taxes)
31-Dec-18	Income tax expense Dr	$41,805.00
	Deferred Tax Liability Dr ($7,500*45%)	$3,375.00
	To Income Tax Payable		$43,020.00
	To Deferred tax Assets ($4,800*45%)		$2,160.00
	(Being current income tax and deferred taxes)