Sabbie Corporation, incorporated in 2018 had the following data. 2018 2019 Accounting income before tax: $ 210,000
Question:
Sabbie Corporation, incorporated in 2018 had the following data.
2018 2019
Accounting income before tax: $ 210,000 $270,000
Items included in arriving at income before tax:
Golf dues 8,000 9,000
Dividends received from a Canadian corp. 20,000 60,000
Depreciation expense 100,000 100,000
Warranty expense 50,000 60,000
Additional information:
Capital cost allowance 150,000 160,000
Warranty costs paid for 30,000 70,000
The tax rate in effect is 32% for 2018 and 35% for 2019.
Required:
- Prepare a tax reconciliation for 2018 and 2019. ie. Calculate taxable income and tax payable.
- Prepare journal entries for 2018 and 2019.
- Prepare a partial balance sheet for 2018 and 2019.
- Prepare the Income Tax Expense disclosure required on the Income Statement for 2018 and 2019.
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta