Carla Vista Co. at the end of 2021, its first year of operations, prepared a reconciliation...
Carla Vista Co. at the end of 2021, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows:
| Pretax financial income | $ 840,000 | ||
| Estimated warranty expenses deductible for taxes when paid | 1,290,000 | ||
| Extra depreciation | (1,677,000) | ||
| Taxable income | $ 453,000 | ||
Estimated warranty expense of $755,000 will be deductible in 2022,
$390,000 in 2023, and $145,000 in 2024. The use of the depreciable
assets will result in taxable amounts of $559,000 in each of the
next three years.
Prepare a table of future taxable and deductible amounts. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Homework Answers
The table of future taxable and deductible amounts will be prepared as follows:
| 2022 | 2023 | 2024 | Total | |
| Future taxable (deductible) amounts | ||||
| Warranties | -755000 | -390000 | -145000 | -1290000 |
| Excess depreciation | 559000 | 559000 | 559000 | 1677000 |
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