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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. 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
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.
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
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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