E18.15 (LO 1, 2) (Two Temporary Differences, Tracked Through 3 Years, Multiple Rates) Taxable income and pretax financial income would be identical for Jiang Group except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared (amounts in thousands).
Taxable income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences)
¥160,000 ¥210,000 ¥90,000 Installment income collected 8,000 8,000 8,000 Expenditures for warranties (5,000) (5,000) (5,000)
Taxable income ¥163,000 ¥213,000 ¥93,000 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) ¥160,000 ¥210,000 ¥90,000 Installment gross profit earned 24,000 –0– –0–
Estimated cost of warranties (15,000) –0– –0–
Income before taxes ¥169,000 ¥210,000 ¥90,000 The tax rates in effect are 2024, 45%; 2025 and 2026, 40%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years.
Instructions Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024, 2025, and 2026.