Solution-Prepare journal entries to record the tax

Prepare journal entries to record the tax implications

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Reference no: EM133144512

Question - Tyre Recycling Inc. reported the following pre-tax accounting incomes (losses):

	Accounting (loss)/income	Tax rates*
2021	$10,000	25%
2022	55,000	20%
2023	(112,000)	20%
2024	21,000	19% -for 2024 and beyond

All enacted in 2021.

The only timing difference was in 2023 when warranty expense was $40,000 and warranties paid out in cash was $30,000. For any losses, any carrybacks possible are done first, and then it is probable that 80% of them not carried back will be applicable against any future taxable income.

Required - Prepare journal entries to record the tax implications for 2023. Show supporting information.

Reference no: EM133144512

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Prepare journal entries to record the tax implications

Reference no: EM133144512

Reference no: EM133144512

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