Reference no: EM132573194

Question - Pan Corp., at the end of 2020, its first year of operations, prepared a reconciliation between pre-tax accounting income and taxable income as follows:

Pre-tax accounting income $300,000

Estimated warranty expenses deductible when paid 800,000

Excess CCA (600,000)

Taxable income $500,000

Estimated warranty expenses of $ 530,000 will be deductible in 2021, $ 200,000 in 2022, and $ 70,000 in 2023. The use of the depreciable assets will result in taxable amounts of $ 200,000 in each of the next three years. The enacted tax rate is 30% and is not expected to change.

Required - Make the required journal entries to record income taxes for 2020.