Using the information provided in BE17- 12 prepare the journal entries required to record the tax provision for year 2 assuming that Reflections reported income before war-ranty costs and taxes of $ 200,000 and incurred actual repair costs of $ 40,000. Assume that the firm did not accrue additional warranty costs in year 2.
BE17-12
Reflections Mirrors, Ltd. offers a three- year warranty on all its products. In year 1, the company reported income before warranty expense of $ 620,000 and estimated that warranty repairs would cost the company $ 150,000 over the three- year period. Actual repairs for the year amounted to $ 50,000. Reflections Mirrors’ tax rate is 40%. Prepare the journal entries required to record the tax provision for year 1.