Prepare the journal entry to record income taxes

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Question - Calculate Depreciation for Year 1 using units of production activity based depreciation. 80 delivery vans were purchased at a cost of $50,000 each. Each delivery van is estimated to be driven a total of 80,000 miles and then be sold for an estimated $10,000. In Year 1 the vans were driven 1,500,000 miles.

Jim's Wholesale Foods had temporary differences related to the following future (deductible) or taxable amounts on December 31, 2020: a) Prepaid Expenses $15,000 b) Depreciation Expense $80,000 and c) Warranty Expense ($22,000). There were no temporary differences on January 1, 2021. Taxable income was $20,000; Jim's had $100,000 of pretax accounting income. The tax rate is 35%. Prepare the journal entry to record income taxes for 2020.

Reference no: EM133031421

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