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Business, 08.04.2020 01:33 jungkookie001

Accrual of tax liability for an interim reporting period Assume that our company reports pretax income for the quarter of $500,000. This is typically a low profit quarter for us, and we estimate that taxable income will be $4,000,000 for the year. We also expect to be eligible for tax credits of $180,000 that will reduce our required tax payment by that amount. a. Compute the estimated effective tax rate for the year assuming a statutory federal and state combined rate of 37.5%. Round to nearest whole percent. b. Prepare the required journal entry to accrue tax liability for the interim period.

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Accrual of tax liability for an interim reporting period Assume that our company reports pretax inco...
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