The following info is available for Reallylost Inc for 2004, its first year operations:
1 . Pre - Tax Accounting income was 500 , 000
2 . The ending balance in Accrued warranty costs was 40,000 . In addition, the company paid $10, 000 in warranty costs during 2004
3. Reallylost made a 100,000 installment sale in 2004. Cash collected on the sale in 2004 was 30,000.
4 . Reallylost paid 15,000 for life insurance premiums on its owners GW Brush and H.F. Clontin
5. The company purchased a new truck for 30,000 on January 1st . Its useful life is 5 years and does not have a salvage value. Tax depreciation for 2004 was 10,000. For book purposes the company use straight line deprecation.
6. The tax rate for all years is expected to be 40 %
Required
1 . Calculate the amount of taxable income for 2004
2 . Prepare a schedule calculating the amount of Deferred taxes for 2004
3 . Prepare the journal entry to record taxes payable and deferred taxes for 2004
Please show all work, thank you very much in advance!