2020 2021 2022 2023 Service Revenue $700,000 790,000 750,000 756,000 Collections $660,000 Income $226,000 818,000 300,000 742,000 268,000 760,000 240,000 There are no differences between accounting income and taxable inc enacted tax rate for each year is 25%.
2020 2021 2022 2023 Service Revenue $700,000 790,000 750,000 756,000 Collections $660,000 Income $226,000 818,000 300,000 742,000 268,000 760,000 240,000 There are no differences between accounting income and taxable inc enacted tax rate for each year is 25%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:-d
Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engagement, up to six months
after services commence. Alsup recognizes service revenue for financial reporting purposes when the services are performed. For tax
purposes, revenue is reported when fees are collected. Service revenue, collections, and pretax accounting income for 2020-2023
are as follows:
2020
2021
2022
2023
Service Revenue
Collections
$700,000
$660,000
790,000
818,000
750,000
756,000
742,000
760,000
Pretax Accounting
Income
$226,000
300,000
268,000
240,000
There are no differences between accounting income and taxable income other than the temporary difference described above. The
enacted tax rate for each year is 25%.
(Hint: You will find it helpful to prepare a schedule that shows the balances in service revenue receivable at December 31, 2020-
2023.)
Required:
1. to 3. Prepare the appropriate journal entries to record Alsup's 2021 income taxes, 2022 income taxes and 2023 income taxes. (If no
entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole
dollars.)
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