PROBLEMS 2 and 3:

Landusky Apparel Incorporated began operations on Jan 1, 2020. They have taxable income in 2020 of $28,000. 2020 Tax Rate is 30%. Expected Future Enacted Tax Rates are: 2021 = 35%, 2022 = 40%. They have the following:

• Unearned Lease Revenue of $3,000
  • It is expected that all the unearned lease revenue will be earned in 2021
• Accounts Receivable of $4,400
  • It is expected that $3,100 of the Accounts Receivable will be received in 2021 and the rest will be received in 2022
• Prepaid Advertising Expense of $1,200
  • It is expected that all the Prepaid Advertising Expense will be used in 2021
• Warranty Expense of $800
  • It is expected that $500 will be spent on to satisfy these warranties in 2021 and the $300 will be spent to satisfy the rest of the warranties in 2022.

1. Fill in the journal entry to record tax expense for Landusky

Date	Account	Debit	Credit
12/31/20