Q2. In its 2019 financial accounting income, Jasper Inc. reports municipal bond interest income of $5,000...

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Q2. In its 2019 financial accounting income, Jasper Inc. reports municipal bond interest income of $5,000 and warranty expense of $18,000. For tax purposes, the municipal bond interest is non-taxable and the warranty costs are deducted at the rate of S4,500 per year as the costs are incurred. Jasper has no other differences between PTFI and TI over the four-year period. The table below summarizes tax and financial income for Jasper from 2019 to 2022: Tax reporting Revenues over deductions 2019 2020 2021 2022 S25,000 $17,000 S18,000 $19,000 Warranty costs incurred (4.500) (4.500) (4.500) (4.500 Taxable income 20,500 12,500 13,500 14,500 Financial reporting Revenues over expenses $25,000 Municipal interest income 2019 2020 2021 2022 S17,000 S18,000 $19,000 5,000 -0- -0- -0- Warranty expense accrued (18.000) -0- Pretax financial income 12,000 17,000 18,000 19,000 Assume an enacted tax rate of 30% for 2019, and 20% for all later years. These rates are known on 1/1/2019. Make journal entries related to taxes for all years. Show supporting calculations for each entry. 2019 2020 Financial reporting 2020 2022 2019 Revenues over expenses $17,000 Municipal interest -0- 2021 $25,000 S18,000 $19,000 income 5,000 -0- -0- Warranty expense accrued (18.000) -0- -0- 17,000 Pretax financial income 12,000 18,000 19,000 Assume an enacted tax rate of 30% for 2019, and 20% for all later years. These rates are known on 1/1/2019. Make journal entries related to taxes for all years. Show supporting calculations for each entry. 2019 2020 2021 2022 Q2. In its 2019 financial accounting income, Jasper Inc. reports municipal bond interest income of $5,000 and warranty expense of $18,000. For tax purposes, the municipal bond interest is non-taxable and the warranty costs are deducted at the rate of S4,500 per year as the costs are incurred. Jasper has no other differences between PTFI and TI over the four-year period. The table below summarizes tax and financial income for Jasper from 2019 to 2022: Tax reporting Revenues over deductions 2019 2020 2021 2022 S25,000 $17,000 S18,000 $19,000 Warranty costs incurred (4.500) (4.500) (4.500) (4.500 Taxable income 20,500 12,500 13,500 14,500 Financial reporting Revenues over expenses $25,000 Municipal interest income 2019 2020 2021 2022 S17,000 S18,000 $19,000 5,000 -0- -0- -0- Warranty expense accrued (18.000) -0- Pretax financial income 12,000 17,000 18,000 19,000 Assume an enacted tax rate of 30% for 2019, and 20% for all later years. These rates are known on 1/1/2019. Make journal entries related to taxes for all years. Show supporting calculations for each entry. 2019 2020 Financial reporting 2020 2022 2019 Revenues over expenses $17,000 Municipal interest -0- 2021 $25,000 S18,000 $19,000 income 5,000 -0- -0- Warranty expense accrued (18.000) -0- -0- 17,000 Pretax financial income 12,000 18,000 19,000 Assume an enacted tax rate of 30% for 2019, and 20% for all later years. These rates are known on 1/1/2019. Make journal entries related to taxes for all years. Show supporting calculations for each entry. 2019 2020 2021 2022

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2019 Particulars DebitS Credit Income Tax expense 3600 1200030 Deferred T... View the full answer