$186400 The following information is available for Carla Vista Company after its

Question

$186400

The following information is available for Carla Vista Company after its first year of operations:
Income before income taxes $320000 Federal income tax payable $139000 Deferred income tax     (5400) Income tax expense 133600 Net income

$186400

Carla Vista estimates its annual warranty expense as a percentage of sales. The amount charged to warranty expense on its books was $102000. Assuming a 40% income tax rate, what amount was actually paid this year for warranty claims?

$88500 $102000 $115500 $133600

Explanation / Answer

deferred income tax 5400

5400 / tax rate 0.40 = 13500

102000 - 13500 = 88500

so answer is $88500

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