The Betta Group reports taxable income in the amount of $625,000 and has a 30% tax...

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The Betta Group reports taxable income in the amount of $625,000 and has a 30% tax rate. Additionally, the company estimates a deferred tax asset of $45,000 due to a book-tax difference in warranty liabilities. After reviewing all available evidence, management determines that only 60% of this amount will ultimately result in tax-deductible expenses over the warranty period. Prepare the necessary journal entries to record the tax provision and valuation allowance for Betta Group under (a) U.S. GAAP and (b) IFRS. Answer: The Betta Group reports taxable income in the amount of $625,000 and has a 30% tax rate. Additionally, the company estimates a deferred tax asset of $45,000 due to a book-tax difference in warranty liabilities. After reviewing all available evidence, management determines that only 60% of this amount will ultimately result in tax-deductible expenses over the warranty period. Prepare the necessary journal entries to record the tax provision and valuation allowance for Betta Group under (a) U.S. GAAP and (b) IFRS. Answer:

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a Under US GAAP 1 Journal entry to record the tax provision Income Tax Expense Dr 187500 Income Tax ... View the full answer