Sharp Company has two temporary differences between its income tax expense and income taxes payable. The information
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Question:
Sharp Company has two temporary differences between its income tax expense and income taxes payable. The information is shown below.
2018 | 2019 | 2020 | |
Pretax financial income | $462,000 | $500,500 | $519,750 |
Excess depreciation expense on tax return | (16,500) | (22,000) | (5,500) |
Excess warranty expense in financial income | 11,000 | 5,500 | 4,400 |
Taxable income | $456,000 | $484,000 | $518,650 |
The income tax rate for all years is 40%.
- Explain your reasoning. Use the blank area in the template following the journal entries to make your notes.
- Prepare the income tax expense section of the income statement for 2018, beginning with the line "Pretax financial income."
Related Book For
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
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