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What amount was actually paid the year for warranty claims

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Reference no: EM132913067

The following information is available for Dee Company after its first year of operations:

Income before taxes 250,000
Federal income tax payable 104,000
Deferred income tax (4,000)
Income tax expense 100,000
Net income 150,000

Problem 1: Dee estimates its annual warranty expense as a percentage of sales. The amount charged to warranty expense on its books was 95,000. Assuming a 40% income tax rate, what amount was actually paid this year for warranty claims?

a. 105,000 b. 100,000 c. 95,000 d. 85,000

Reference no: EM132913067

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