Examine the amounts necessary to record income taxes

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Reference no: EM132088288

Question: For the year ended December 31, 2016, Joey Co. reported pretax accounting income of $977,000. Selected information for 2015 from Joey Co.'s records follows:

Interest Income on Municipal Bonds	$32,000
Depreciation claimed on the 2016 tax return in excess of depreciation on the income statement	$55,000
Warranty Expense reported on the Income Statement	$26,000
Actual Warranty expenditures in 2016	$16,000

Joey Co.'s income tax rate is 35%. At January 1, 2016, Joey Co.'s records indicated balances of zero and $12,000 in its deferred tax asset and deferred tax liability accounts, respectively.

Required: 1) Determine the amounts necessary to record income taxes in 2016 and prepare the appropriate journal entry.

2) What is Joey's 2016 Net Income? [Show your answer by preparing the Income tax section of the Income Statement].

3) Based on the new FASB Reporting model that was discussed in class, how would the Deferred taxes be reported on the balance Sheet?

Reference no: EM132088288

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