The information that follows pertains to Esther Food Products:
a. At December 31, 2011, temporary differences were associated with the following future taxable (deductible) amounts:
Depreciation ...... $60,000
Prepaid expenses ...... 17,000
Warranty expenses .... (12,000)
b. No temporary differences existed at the beginning of 2011.
c. Pretax accounting income was $80,000 and taxable income was $15,000 for the year ended December 31, 2011.
d. The tax rate is 40%.
Required:
Determine the amounts necessary to record income taxes for 2011 and prepare the appropriate journal entry.