Good Dog Enterprises sells goods with a warranty. At December 31, 2021 Good Dog has a...

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Good Dog Enterprises sells goods with a warranty. At December 31, 2021 Good Dog has a warranty liability of $2 million and taxable income of $75 million. At December 31, 2020 Good Dog reported a deferred tax asset of $435,000 related to this difference in reporting warranties which was its only temporary difference. Assuming a tax rate of 25%, the journal entry Good Dog would make for income tax provisions on December 31, 2021 would include Good Dog Enterprises sells goods with a warranty. At December 31, 2021 Good Dog has a warranty liability of $2 million and taxable income of $75 million. At December 31, 2020 Good Dog reported a deferred tax asset of $435,000 related to this difference in reporting warranties which was its only temporary difference. Assuming a tax rate of 25%, the journal entry Good Dog would make for income tax provisions on December 31, 2021 would include

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To determine the journal entry for income tax provisions on December 31 2021 we need to consider the ... View the full answer