The accounting records of Flint Inc. show the following data for 2025: Life insurance expense on officers was $7,000. Equipment was acquired in early January for $441,000. Straight-line depreciation over a 6-year life is used, with no salvage value. For tax purposes, Flint used a 30% rate to calculate depreciation. Interest revenue on municipal bonds totaled $3,400. Product warranties were estimated to be $87,000 in 2025. Actual repair and labor costs related to the warranties in 2025 were $24,000. The remainder is estimated to be paid evenly in 2026 and 2027. Sales on an accrual basis were $518,000. For tax purposes, $399,000 was recorded on the installment-sales method. Fines incurred for securities violations were $11,000. Pretax financial income was $482,000. The tax rate is 30% 1. 2. 3. 4. 5. 6. 7.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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The accounting records of Flint Inc. show the following data for 2025:
Life insurance expense on officers was $7,000.
2. Equipment was acquired in early January for $441,000. Straight-line depreciation over a 6-year life is used, with no salvage
value. For tax purposes, Flint used a 30% rate to calculate depreciation.
Interest revenue on municipal bonds totaled $3,400.
Product warranties were estimated to be $87,000 in 2025. Actual repair and labor costs related to the warranties in 2025
were $24,000. The remainder is estimated to be paid evenly in 2026 and 2027.
Sales on an accrual basis were $518,000. For tax purposes, $399,000 was recorded on the installment-sales method.
Fines incurred for securities violations were $11,000.
Pretax financial income was $482,000. The tax rate is 30%.
1.
3.
4.
5.
6.
7.
Transcribed Image Text:The accounting records of Flint Inc. show the following data for 2025: Life insurance expense on officers was $7,000. 2. Equipment was acquired in early January for $441,000. Straight-line depreciation over a 6-year life is used, with no salvage value. For tax purposes, Flint used a 30% rate to calculate depreciation. Interest revenue on municipal bonds totaled $3,400. Product warranties were estimated to be $87,000 in 2025. Actual repair and labor costs related to the warranties in 2025 were $24,000. The remainder is estimated to be paid evenly in 2026 and 2027. Sales on an accrual basis were $518,000. For tax purposes, $399,000 was recorded on the installment-sales method. Fines incurred for securities violations were $11,000. Pretax financial income was $482,000. The tax rate is 30%. 1. 3. 4. 5. 6. 7.
Prepare a schedule starting with pretax financial income in 2025 and ending with taxable income in 2025. (Enter negative amounts
using either a negative sign preceding the number eg. -45 or parentheses eg. (45).)
Schedule of Pretax Financial Income
and Taxable Income for 2025
Pretax financial income
Permanent differences
Insurance Expense
Temporary differences
482000
Taxable income
7000
489000
58800
4302-
000
10
3400
426800
119000
545800
Transcribed Image Text:Prepare a schedule starting with pretax financial income in 2025 and ending with taxable income in 2025. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses eg. (45).) Schedule of Pretax Financial Income and Taxable Income for 2025 Pretax financial income Permanent differences Insurance Expense Temporary differences 482000 Taxable income 7000 489000 58800 4302- 000 10 3400 426800 119000 545800
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