Henderson Construction Equipment Manufacturers engaged in an installment sale with one of its major customers. The firm negotiated the terms of the installment sale for a specialized piece of equipment; full payment is required within 3 years. We present information related to Henderson's first 3 years of operation: (Click the icon to view the data) Read the requirements Requirement a. Prepare the journal entries required to record the tax expense for all 3 years. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin with the journal entry required to record the tax expense for Year 1. Account Year 1 Next prepare the journal entry required to record the tax expense for Year 2. Account Year 2 Now prepare the journal entry required to record the tax expense for Year 3. Read the requirements. Requirements Data table - X Year 1 Year 2 Year 3 a. Prepare the journal entries required to record the tax expense for all 3 years. b. Determine the net income reported on the income statement for the 3 years. Account GAAP Tax GAAP Tax GAAP Tax Sales $ 22,000 $ 22,000 $ Gross profit on installment sales $ 4,000 0 13,500 $ 0 13,500 $ 14,800 $ 14,800 0 0 0 Taxable portion of cash collected on installment sales 1,300 Print Done Operating expenses (200) (200) (1,200) 1,000 (1,200) 1,700 (800) (800) $ 25,800 $ 12,300 $ 14,000 Next prepare the journal entry required to record the tax expense for Year 2. Income before tax Taxable income $ 23,100 $ 13,300 $ 15,700 × 40% x 40% × 40% Account Year 2 Tax rate Tax payable $ 9,240 $ 5,320 $ 6,280
Henderson Construction Equipment Manufacturers engaged in an installment sale with one of its major customers. The firm negotiated the terms of the installment sale for a specialized piece of equipment; full payment is required within 3 years. We present information related to Henderson's first 3 years of operation: (Click the icon to view the data) Read the requirements Requirement a. Prepare the journal entries required to record the tax expense for all 3 years. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin with the journal entry required to record the tax expense for Year 1. Account Year 1 Next prepare the journal entry required to record the tax expense for Year 2. Account Year 2 Now prepare the journal entry required to record the tax expense for Year 3. Read the requirements. Requirements Data table - X Year 1 Year 2 Year 3 a. Prepare the journal entries required to record the tax expense for all 3 years. b. Determine the net income reported on the income statement for the 3 years. Account GAAP Tax GAAP Tax GAAP Tax Sales $ 22,000 $ 22,000 $ Gross profit on installment sales $ 4,000 0 13,500 $ 0 13,500 $ 14,800 $ 14,800 0 0 0 Taxable portion of cash collected on installment sales 1,300 Print Done Operating expenses (200) (200) (1,200) 1,000 (1,200) 1,700 (800) (800) $ 25,800 $ 12,300 $ 14,000 Next prepare the journal entry required to record the tax expense for Year 2. Income before tax Taxable income $ 23,100 $ 13,300 $ 15,700 × 40% x 40% × 40% Account Year 2 Tax rate Tax payable $ 9,240 $ 5,320 $ 6,280
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 3RE: Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that...
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![Henderson Construction Equipment Manufacturers engaged in an installment sale with one of its major customers. The firm negotiated the terms of the installment sale for a specialized piece of equipment; full
payment is required within 3 years. We present information related to Henderson's first 3 years of operation:
(Click the icon to view the data)
Read the requirements
Requirement a. Prepare the journal entries required to record the tax expense for all 3 years. (Record debits first, then credits. Exclude explanations from any journal entries.)
Begin with the journal entry required to record the tax expense for Year 1.
Account
Year 1
Next prepare the journal entry required to record the tax expense for Year 2.
Account
Year 2
Now prepare the journal entry required to record the tax expense for Year 3.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87f377c8-556b-40c3-ad73-583aac17d9d0%2Fe1354c23-3a7e-4a7e-8666-f1711cb3c824%2Feb7hjvr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Henderson Construction Equipment Manufacturers engaged in an installment sale with one of its major customers. The firm negotiated the terms of the installment sale for a specialized piece of equipment; full
payment is required within 3 years. We present information related to Henderson's first 3 years of operation:
(Click the icon to view the data)
Read the requirements
Requirement a. Prepare the journal entries required to record the tax expense for all 3 years. (Record debits first, then credits. Exclude explanations from any journal entries.)
Begin with the journal entry required to record the tax expense for Year 1.
Account
Year 1
Next prepare the journal entry required to record the tax expense for Year 2.
Account
Year 2
Now prepare the journal entry required to record the tax expense for Year 3.
![Read the requirements.
Requirements
Data table
-
X
Year 1
Year 2
Year 3
a. Prepare the journal entries required to record the tax expense for all 3 years.
b. Determine the net income reported on the income statement for the 3 years.
Account
GAAP
Tax
GAAP
Tax
GAAP
Tax
Sales
$
22,000 $
22,000 $
Gross profit on installment sales
$
4,000
0
13,500 $
0
13,500 $ 14,800 $
14,800
0
0
0
Taxable portion of cash collected
on installment sales
1,300
Print
Done
Operating expenses
(200)
(200)
(1,200)
1,000
(1,200)
1,700
(800)
(800)
$
25,800
$ 12,300
$
14,000
Next prepare the journal entry required to record the tax expense for Year 2.
Income before tax
Taxable income
$
23,100
$
13,300
$
15,700
× 40%
x 40%
× 40%
Account
Year 2
Tax rate
Tax payable
$
9,240
$
5,320
$
6,280](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87f377c8-556b-40c3-ad73-583aac17d9d0%2Fe1354c23-3a7e-4a7e-8666-f1711cb3c824%2Fn9crlnj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Read the requirements.
Requirements
Data table
-
X
Year 1
Year 2
Year 3
a. Prepare the journal entries required to record the tax expense for all 3 years.
b. Determine the net income reported on the income statement for the 3 years.
Account
GAAP
Tax
GAAP
Tax
GAAP
Tax
Sales
$
22,000 $
22,000 $
Gross profit on installment sales
$
4,000
0
13,500 $
0
13,500 $ 14,800 $
14,800
0
0
0
Taxable portion of cash collected
on installment sales
1,300
Print
Done
Operating expenses
(200)
(200)
(1,200)
1,000
(1,200)
1,700
(800)
(800)
$
25,800
$ 12,300
$
14,000
Next prepare the journal entry required to record the tax expense for Year 2.
Income before tax
Taxable income
$
23,100
$
13,300
$
15,700
× 40%
x 40%
× 40%
Account
Year 2
Tax rate
Tax payable
$
9,240
$
5,320
$
6,280
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