What are the journal entries to record the tax expense

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Question - Motor Parts Limited offers a warranty on all the spare parts it sells. This period accrued warranty is $5000. For tax purpose there is no deduction for the warranty until payments are made.

Motor Parts Limited also has equipment that has a useful life for accounting purposes of 4 years and for tax purposes 3 years. This equipment was purchased at the beginning of the current period, cost $9000 and has no residual value. The straight line method of depreciation is used for both accounting and tax purposes. The accounting profit before tax for this period is $80 000. The tax rate is 30%.

Required - What are the journal entries to record the tax expense and tax payable?

Reference no: EM132631315

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