Journal entry to record the tax provision


Problem:

The information that follows pertains to Raymond Company. Temporary differences for the year 2006 are summarized below.

Expenses deducted on the tax return, but not included on the income statement:

Depreciation            $60,000
Prepaid expense         8,000

Expenses reported on the income statement, but not deducted on the tax return:

Warranty expense       9,000

- No temporary differences existed at the beginning of 2006.
- Taxable income was $8,000 for 2006.
- Income statement for the year included $6,000 interest on municipal bonds.
- The tax rate is 30%.

Required: Prepare the journal entry to record the tax provision for 2006. Provide supporting computations.

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Accounting Basics: Journal entry to record the tax provision
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