Sass Corp. is in its first year of operation. The company has pretax financial income of...
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Sass Corp. is in its first year of operation. The company has pretax financial income of $50,000. The company has the following items recorded in its records. No estimated tax payments were made during 2020. 17,500 Premium of life insurance for its key officers Tax depreciation in excess of book depreciation Interest on municipal bonds Warranty expense Actual warranty repairs Bad debt expense 100,000 5,800 6,500 4,200 2,200 Beginning balance in allowances for uncollectible accounts End balance in allowances for uncollectible accounts 900 Tax rates for 2020 and future years 20% INSTRUCTIONS: (a) Determine taxable income for 2020. (b) Prepare the journal entry to record income taxes for 2020. (c) Prepare the income tax expense section of the income statement for the year ended Dec. 31, 2020. Sass Corp. is in its first year of operation. The company has pretax financial income of $50,000. The company has the following items recorded in its records. No estimated tax payments were made during 2020. 17,500 Premium of life insurance for its key officers Tax depreciation in excess of book depreciation Interest on municipal bonds Warranty expense Actual warranty repairs Bad debt expense 100,000 5,800 6,500 4,200 2,200 Beginning balance in allowances for uncollectible accounts End balance in allowances for uncollectible accounts 900 Tax rates for 2020 and future years 20% INSTRUCTIONS: (a) Determine taxable income for 2020. (b) Prepare the journal entry to record income taxes for 2020. (c) Prepare the income tax expense section of the income statement for the year ended Dec. 31, 2020.
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Related Book For
Accounting Tools for Business Decision Making
ISBN: 978-1118096895
6th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
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