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EGR Company Provided You with the Following Information

question 34

Essay

EGR Company provided you with the following information:
2013 Net Income: $1,500,000
2014 Net Income: $900,000
2013 Tax rate: 35%
2014 Tax rate: 40%
In addition,the only difference between accounting and tax are warranty costs accrued of $100,000 in 2013.No actual warranty expenses were incurred in 2013 or 2014.Prepare journal entries for 2013 and 2014 to record income tax expense.


Definitions:

Sophisticated

Characterized by a high level of complexity, refinement, or development, often resulting from extensive experience or knowledge.

Product Innovation

The process of creating new products or significantly improving existing ones, often to meet new customer needs or market demands.

Competitive Advantage

The attribute or set of attributes that allows an organization to outperform its competitors, providing greater value to its customers or operating more efficiently.

Flexibility

The quality of being able to adapt to new, different, or changing requirements and situations.

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