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For its first year if operations, Altitude Inc. reports pretax GAAP income of $100,000 in 2020....

For its first year if operations, Altitude Inc. reports pretax GAAP income of $100,000 in 2020. Assume pretax income in 2021 and 2022 of $125,000 and $90,000 respectively. The enacted income tax rate in all years is 25%. The following additional information is available for the first three years of operation (with the exception of the one item in the 4th year).

  • Prepaid rent in the amount of $20,000 was recorded on December 21, 2020 for 2021 rent.
  • A warranty accrual of 30,000 was recorded on December 31, 2020. The warranty was paid evenly over the years 2021-2023.
  • The company recorded interest revenue of $500 each of the three years on municipal bonds.
  1. Compute the income tax payable each year for 202, 2021, 2022
  2. Determined the balance of any deferred tax assets or deferred tax liabilities at the end of each year (2020, 2021, 2022)
  3. Record the journal entry related to taxes in 2020, 2021, 20222

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ekkarill92 answered 3 weeks ago
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