Question

Prepare he income tax accrual assuming the tax rate is 20%. the difference between book and tax are as follows: future deductible amounts: warranty expense and vacation pay from parts (b) and (c). future taxable amount: tax depreciation was 240,000, whereas book depreciation was only 40,000. taxable income for 2022 is 1,471,614. there was no previous balances in the deferred tax asset or deferred tax liability accounts.

Answer 1

To prepare the income tax accrual, consider future deductible amounts and future taxable amounts. Calculate the income tax accrual using the formula: Income tax accrual = taxable income * tax rate. In this case, the income tax accrual is $294,322.80.

Step-by-step explanation:

To prepare the income tax accrual, we need to consider the future deductible amounts and future taxable amounts. The difference between book and tax for deductible amounts includes the warranty expense and vacation pay. The future taxable amount is the difference between tax depreciation and book depreciation. Given a tax rate of 20% and a taxable income of $1,471,614, we can calculate the income tax accrual using the formula: Income tax accrual = taxable income * tax rate.

Future deductible amounts: warranty expense and vacation pay

Future taxable amount: tax depreciation - book depreciation

Taxable income for 2022: $1,471,614

Tax rate: 20%

Income tax accrual = $1,471,614 * 20% = $294,322.80