Deferred income taxes
Hunt Co at the end of its first year of operations, prepared a reconciliation between pretax
financial income and taxable income as follows:
Estimated warranty expense of $ will be deductible in $ in and
$ in The use of the depreciable assets will result in taxable amounts of $ in
each of the next three years.
Instructions
a Prepare a table of future taxable and deductible amounts.
b Prepare the journal entry to record income tax expense, deferred income taxes, and income
taxes payable for assuming an income tax rate of for all years.
