During Its First Year of Operations,Karol Corp

question 44

Essay

During its first year of operations,Karol Corp.reported the following information:
• Income before income taxes for the year was $550,000 and the tax rate was 35%.
• Depreciation expense was $100,000 and CCA was $50,000.
• Warranty expense was reported at $20,000,while actual cash paid out was $10,000.
• $25,000 of expenses included in income were not deductible for tax purposes.
• No other items affected deferred tax amounts besides these transactions.
Required:
Prepare the journal entries to record income tax expense for the year.

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal.