Actual quarterly earnings and quarterly estimates of annual earnings for Sloan Company for the year ended December
Question:
Actual quarterly earnings and quarterly estimates of annual earnings for Sloan Company for the year ended December 31, 2008 are as follows:
The combined state and federal tax rate for 2008 is 30%. Sloan Company estimated it would have permanent differences between accounting income and taxable income during 2008. Each quarter’s estimate of these annual differences is provided in the following table:
The actual amount of permanent differences for 2008 were environmental penalties, $14,000 dividend exclusion, $55,000.
Required:
Prepare journal entries to record Sloan Company’s 2008 quarterly income taxprovisions.
Actual Quarterly Earnings Quarterly Estimates of Quarter Annual Earnings $95,000 85,000 92,000 96,000 $400,000 370,000 370,000 N/A Estimated Permanent Differences Estimate at End of Quarter Penalty for Pollutionm Dividend Exclusion $14,000 14,000 14,000 $40,000 40,000 50,000
Step by Step Answer:
First Quarter Estimated Annual Earnings 400000 Less Net Permanent Differences 26000 Estimated Taxabl...View the full answer
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A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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