The Betta Group Reports Taxable Income in the Amount of $625,000

question 15

Essay

The Betta Group reports taxable income in the amount of $625,000 and has a 30% tax rate. Additionally, the company estimates a deferred tax asset of $45,000 due to a book-tax difference in warranty liabilities. After reviewing all available evidence, management determines that only 60% of this amount will ultimately result in tax-deductible expenses over the warranty period.
Prepare the necessary journal entries to record the tax provision and valuation allowance for Betta Group under (a) U.S. GAAP and (b) IFRS.

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Definitions:

Cultivation

The process of fostering growth, whether in agriculture, relationships, or personal development.

Relationships

Connections or associations between individuals or entities based on interactions, emotions, or other bonds.

Workplace

A location or environment where people are employed to perform tasks or duties for a business or organization.

Schools

Institutions designed for the teaching of students under the direction of teachers, providing education and learning environments.