Consider the following accounting treatments: (a) Accounted for prospectively. (b) Accounted for retrospectively. Required: Indicate...
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Accounting
Consider the following accounting treatments: (a) Accounted for prospectively. (b) Accounted for retrospectively. Required: Indicate the appropriate accounting treatment for each of the above types of changes and errors. Peter M. Dell Co. purchased equipment for $510,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time. Depreciation has been entered for 7 years on a straight-line basis. On 1/1/2020, it is determined that the total estimated life should be 15 years with a salvage value of $5,000 at the end of that time. Required: Prepare the journal entry to record depreciation for 2020 C Company has one temporary difference between its income tax expense and income 8. taxes payable as follows: 2019 2020 840,000 910,000 Pretax financial income Excess depreciation expense on tax return Taxable income -30,000 -40,000 810,000 870,000 The income tax rate for all years is 40%. Required Assuming there were no temporary differences prior to 2019, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019 and 2020
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