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 2023-2026 are as follows: 2023 2024 2025 2026 Service Revenue $ 740,000 830,000 790,000 796,000 Collections. $ 700,000 858,000 782,000 800,000 Pretax Accounting Income $ 266,000 340,000 308,000 280,000 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, 2023- 2026.) Required: 1. to 3. Prepare the appropriate journal entries to record Alsup's 2024 income taxes, 2025 income taxes, and 2026 income taxes. Note: 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 2023-2026
are as follows:
2023
2024
2025
2026
Service Revenue
$ 740,000
830,000
790,000
796,000
Collections
$ 700,000
858,000
782,000
800,000
Pretax Accounting
Income
$266,000
340,000
308,000
280,000
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, 2023-
2026.)
Required:
1. to 3. Prepare the appropriate journal entries to record Alsup's 2024 income taxes, 2025 income taxes, and 2026 income taxes.
Note: 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.
Transcribed Image Text: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 2023-2026 are as follows: 2023 2024 2025 2026 Service Revenue $ 740,000 830,000 790,000 796,000 Collections $ 700,000 858,000 782,000 800,000 Pretax Accounting Income $266,000 340,000 308,000 280,000 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, 2023- 2026.) Required: 1. to 3. Prepare the appropriate journal entries to record Alsup's 2024 income taxes, 2025 income taxes, and 2026 income taxes. Note: 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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