Fortunes Hotel Associates reported the following income information for the current year:

Required
a. Prepare the journal entry to record the tax provision for the current year.
b. Are there any differences between the federal income tax rate and Fortunes€™ effective tax rate? Explain.

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Current Year Account Sales Operating Expenses Depreciation Expense Estimated Warranty Cost Actual Warranty Repairs Income before Tax Taxable Income Tax Rate Tax Payable GAAP $500,000 $500,000 (280,000) (290,000 Tax 70,000) (100,000) (30,000) 10,000) $120,000 110,000 x 35% S 38,500