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The following information is provided calculate taxable income: Income before taxes=900,000 Income before taxes includes the following: Interest...
The following information is provided calculate taxable income:Income before taxes=900,000Income before taxes includes the following:Interest income of $80,000 from municipal bonds.Rental Income collected in advance in 2011 and earned in 2012=$20,000A piece of equipment was purchased in 2012. Depreciated per books for $40,000 and per income taxes for $100,000.Warranty expense in 2012 was $200,000 but for tax purposes only $6,000 was deductible.Assume that at the beginning of 2012 deferred tax asset=$8,000 due to the rental income.Tax rate for 2012 and foreseeable future is 30%.Requirement:A.Calculate taxable incomeB.Make the necessary tax entry, including the amounts for tax expense and deferred taxes.
A.Calculate taxable incomeParticularsIncome before taxesAdd Rental incomeAdd difference in warranty expensesLess difference in depreciationTaxable income Amount $900,00020,000194,000...