Question

Spur Company’s actual earnings for the first two quarters of 2008 and its estimate during each quarter of its annual earnings are:
Actual first-quarter earnings............ $ 400,000
Actual second-quarter earnings............ 510,000
First-quarter estimate of annual earnings...... 1,350,000
Second-quarter estimate of annual earnings...... 1,420,000
Spur Company estimated its permanent differences between accounting income and taxable income for 2008 as:
Environmental violation penalties......... $ 25,000
Dividend income exclusion............ 180,000
These estimates did not change during the second quarter. The combined state and federal tax rate for Spur Company for 2008 is 42%.

Required:
Prepare journal entries to record Spur Company’s provisions for income taxes for each of the first two quarters of 2008.



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  • CreatedMarch 13, 2015
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