Harley Davidson Motorcycles has pretax income of $1,000,000 in years 2017, 2018, and 2019. NOT inclusive...

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Harley Davidson Motorcycles has pretax income of $1,000,000 in years 2017, 2018, and 2019. NOT inclusive of this amount, they sell and collect 2 year extended warranties in the amount of $200,000 in 2017. Based on past experience, it is deemed that 60% of this amount is earned in the year subsequent to cash payment (2018) and 40% is earned in the final year of the warranty (2019). Required: Schedule Financial Income and Taxable Income; prepare journal entries to record tax expense, deferred income taxes, and income taxes payable for 2017, 2018, and 2019. Assume a corporate tax rate of 40% for all years. Harley Davidson Motorcycles has pretax income of $1,000,000 in years 2017, 2018, and 2019. NOT inclusive of this amount, they sell and collect 2 year extended warranties in the amount of $200,000 in 2017. Based on past experience, it is deemed that 60% of this amount is earned in the year subsequent to cash payment (2018) and 40% is earned in the final year of the warranty (2019). Required: Schedule Financial Income and Taxable Income; prepare journal entries to record tax expense, deferred income taxes, and income taxes payable for 2017, 2018, and 2019. Assume a corporate tax rate of 40% for all years.

Answer rating: 100% (QA)

Particulars 2017 2018S 2019 Financial income A 1200000 1000000 1000000 Taxable income B 1000000 1120... View the full answer