Pharoah Corporation recorded warranty accruals as at December 31, 2023, in the amount of $151,500. This...
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Pharoah Corporation recorded warranty accruals as at December 31, 2023, in the amount of $151,500. This reversing difference will cause deductible amounts of $50,600 in 2024, $35,400 in 2025, and $65,500 in 2026. No other reversing difference exists. Pharoah's accounting income for 2023 is $139,000 and $162,000 in each of 2024 and 2025 and the tax rate is 25%. There are no deferred tax accounts at the beginning of 2023. Pharoah Corporation was informed on December 31, 2024 that the enacted rate for 2025 and subsequent years is 28%. Calculate the deferred tax balances at December 31, 2024 and 2025. Calculate taxable income and income tax payable for 2024 and 2025. Prepare the journal entries to record income taxes for 2024 and 2025. Prepare the income tax expense section of the income statements for 2024 and 2025, beginning with the line "Income before income tax." Pharoah Corporation recorded warranty accruals as at December 31, 2023, in the amount of $151,500. This reversing difference will cause deductible amounts of $50,600 in 2024, $35,400 in 2025, and $65,500 in 2026. No other reversing difference exists. Pharoah's accounting income for 2023 is $139,000 and $162,000 in each of 2024 and 2025 and the tax rate is 25%. There are no deferred tax accounts at the beginning of 2023. Pharoah Corporation was informed on December 31, 2024 that the enacted rate for 2025 and subsequent years is 28%. Calculate the deferred tax balances at December 31, 2024 and 2025. Calculate taxable income and income tax payable for 2024 and 2025. Prepare the journal entries to record income taxes for 2024 and 2025. Prepare the income tax expense section of the income statements for 2024 and 2025, beginning with the line "Income before income tax."
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To calculate the deferred tax balances at December 31 2024 and 2025 we need to determine the temporary differences related to warranty accruals and ap... View the full answer
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781119497042
12th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
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