Prepare a schedule starting with pretax financial income

Reference no: EM131933465

Problem

The accounting records of Pinecone Inc. show the following data for 2014.

Life insurance expense on officers was $7,000.

Equipment was acquired in early January for $450,000. Straight-line depreciation over a 6-year life is used, with no salvage value. For tax purposes, Pinecone used a 30% rate to calculate depreciation.

Interest revenue on municipal bonds totaled $3,600.

Product warranties were estimated to be $90,000 in 2014. Actual repair and labor costs related to the warranties in 2014 were $24,000. The remainder is estimated to be paid evenly in 2015 and 2016.

Sales on an accrual basis were $500,000. For tax purposes, $400,000 was recorded on the installment-sales method.

Fines incurred for securities violations were $10,600.

Pretax financial income was $460,000. The tax rate is 40%.

Instructions

(a) Prepare a schedule starting with pretax financial income in 2014 and ending with taxable income in 2014.

(b) Prepare the journal entry for 2014 to record income taxes payable, income tax expense, and deferred income taxes.

Reference no: EM131933465

Questions Cloud

Discuss the legal basis of the statement : • Explain the Salomon v A Salomon And Co Ltd [1897] AC 22 case. How is this case incorporated in the Corporations Act 2001 (Cth)?

Write at least three five-year goals toward your career : Write at least three five-year goals toward your career by using the guidelines within the SMART method.

Prepare all journal entries for p and s : Prepare all journal entries for P and S. In addition, prepare the w/p entry to eliminate the intercompany sale of land.

Discuss and explain three types of unprotected speech : Discuss and explain three types of unprotected speech. Discuss concept and two forms of defamation and it's relationship to the First Amendment.

Prepare a schedule starting with pretax financial income : Prepare a schedule starting with pretax financial income in 2014 and ending with taxable income in 2014. Life insurance expense on officers was $7,000.

Research the topic of vulnerability assessment : Develop a paper suggesting an approach to vulnerability assessment and open-source tools that a small business might use to meet these goals.

Calculate the change in contribution margin to each division : Calculate the change in contribution margin to each division, and to the company as a whole, if top management forces the printing operation.

State the elements of the arizona castle doctrine law : Summarize the story of Harold Fish's shooting Grant Kuenzli? State the elements of the Arizona castle doctrine law.

Develop the work breakdown structure : From your work breakdown structure, develop a project task list with dependencies and add durations, using MS Project.

User Account

All Pages