The Information That Follows Pertains to Julia Company:
(A $$\begin{array} { l r } \text { Depreciation } & \$ 60,000 \\\text { Prepaid expense } & 8,000\end{array}$$

question 99

Essay

The information that follows pertains to Julia Company:
(a.) Temporary differences for the year 2009 are summarized below.
Expenses deducted in the tax return, but not included in the income statement:
Expenses reported in the income statement, but not deducted in the tax return:
(b.) No temporary differences existed at the beginning of 2009.
(c.) Pretax accounting income was $50,000 and taxable income was $8,000 for 2009.
(d.) There were no permanent differences.
(e.) The tax rate is 30%.
Required:
Prepare the journal entry to record the tax provision for 2009. Provide supporting computations.
$$\begin{array} { l r } \text { Depreciation } & \$ 60,000 \\\text { Prepaid expense } & 8,000\end{array}$$ $$\text { Warranty expense } 9,000$$

---

Definitions:

Foreign Currency Approach

A method in international finance that involves analyzing business or investment decisions based on their impact in foreign currency terms.

Inflation Rate

The increase in the average price levels of goods and services, resulting in reduced purchasing capacity.

Spot Rate

The ongoing market value at which an individual asset can be acquired or disposed of for immediate transfer.

Spot Exchange Rate

The present rate at which a currency is traded for instant delivery.