Multiple temporary differences; record income taxes
Response to the following problem:
The information that follows pertains to Esther Food Products:
a. At December 31, 2016, temporary differences were associated with the following future taxable (deductible) amounts:
Depreciation $60,000
Prepaid expenses 17,000
Warranty expenses (12,000)
b. No temporary differences existed at the beginning of 2016.
c. Pretax accounting income was $80,000 and taxable income was $15,000 for the year ended December 31, 2016.
d. The tax rate is 40%.
Required:
Determine the amounts necessary to record income taxes for 2016 and prepare the appropriate journal entry