Assignment: Deferred Taxes
Following is information concerning the difference between Guilbert Corporation's taxable income and its GAAP income.
|
Taxable income
|
$2,014
|
$2,015
|
$2,016
|
|
Excess of revenues over expenses
|
$640,000
|
$840,000
|
$360,000
|
|
(excluding the following two items)
|
|
Installment sales profits collected
|
28,000
|
28,000
|
28,000
|
|
Expenditures for warranties
|
-20,000
|
($20,000)
|
($20,000)
|
|
Taxable income
|
$648,000
|
$848,000
|
$368,000
|
|
|
|
|
|
Pretax financial income
|
$2,014
|
$2,015
|
$2,016
|
|
Excess of revenues over expenses
|
$640,000
|
$840,000
|
$360,000
|
|
(excluding the following two items)
|
|
Installment sales profits collected
|
84,000
|
-0-
|
-0-
|
|
Expenditures for warranties
|
-60,000
|
-0-
|
-0-
|
|
Income before taxes
|
$664,000
|
$840,000
|
$360,000
|
The tax rates in effect are: 2014, 40%; 2015 and 2016, 45%. The rates were enacted into law on January 1, 2014. No deferred taxes existed at the beginning of 2014.
Required
(a) Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2014.
(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2015.
(c) Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2016.