Question:
The information that follows pertains to Esther Food Products:
a.) At Dec 31,2011 temporary differences were associated with the following future taxable(deductible) amounts:
Depreciation $60,000
Prepaid Expense 17,000
Warranty Expense (12,000)
b.) No temporary difference existed at the beginning of 2011.
c.)Pretax accounting income was $80,000 and taxable income was $15,000 for the year ended Dec 31, 2011.
d.)The tax rate is 40%
Required:
Determine the amounts necessary to record income taxes for 2011 and prepare the appropriate journal entry.