Calculate the Interim Provision for Q2 and show the journal entry. For simplicity, assume no...
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Accounting
Calculate the Interim Provision for Q2 and show the journal entry. For simplicity, assume no entry was previously recorded for the first quarter. Additional facts:
Statutory tax rate for County A is 21%.
Statutory tax rate for Country B is 15%
A tax law was enacted in Q1 that would allow the company to claim a tax credit of $500 for the previous year.
There was an event that occurred in Country A subsequent to the Q2 financials in which the company paid a $40,000 penalty to the government (a material number). After careful considerations, management decided not to recognize this for the Q2 financials.
Item Country A Country B Country A Country B
YTD Q2 YTD Q2 Annual Annual Pretax Book Income 40,000 10,000 100,000 20,000
Meal & Entertainment Adjustments 5,000 1,000 20,000 2,000
