Flatworld Shipping Company reports taxable income of $912,000 on its income tax return for the year ended

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Flatworld Shipping Company reports taxable income of $912,000 on its income tax return for the year ended December 31, 2013, its first year of operations. Temporary differences between financial income and taxable income for the year are as follows:
Tax depreciation in excess of book depreciation . . . . . . . . . . . . . . . . . . . . . . . . $ 95,000
Accrual for product liability claims in excess of actual claims (estimated product claims payable is a current liability) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000
Reported installment sales income in excess of taxable installment sales income (installments receivable is a current asset) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315,000
The enacted income tax rate is 35% for 2013 and all future years. Prepare the journal entries necessary to record income taxes for 2013.
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Intermediate Accounting

ISBN: 978-0538479738

18th edition

Authors: Earl K. Stice, James D. Stice

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