Please explain how you get the journal entries below. The DeVille Company reported pretax accounting income on its income statement as follows: 2021 $ 355,000 2022 275,000 2023 345,000 2024 385,000 Included in the income of 2021 was an installment sale of property in the amount of $30,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $12,000 in 2022, $15,000 in 2023, and $3,000 in 2024. Included in the 2023 income was $10,000 interest from investments in municipal governmental bonds. The enacted tax rate for 2021 and 2022 was 40%, but during 2022, new tax legislation was passed reducing the tax rate to 25% for the years 2023 and beyond. Required: Prepare the year-end journal entries to record income taxes for the years 2021–2024. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Please explain how you get the journal entries below.
The DeVille Company reported pretax accounting income on its income statement as follows:
| 2021 | $ | 355,000 | |
| 2022 | 275,000 | ||
| 2023 | 345,000 | ||
| 2024 | 385,000 | ||
Included in the income of 2021 was an installment sale of property in the amount of $30,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $12,000 in 2022, $15,000 in 2023, and $3,000 in 2024.
Included in the 2023 income was $10,000 interest from investments in municipal governmental bonds.
The enacted tax rate for 2021 and 2022 was 40%, but during 2022, new tax legislation was passed reducing the tax rate to 25% for the years 2023 and beyond.
Required:
Prepare the year-end journal entries to record income taxes for the years 2021–2024. (If no entry is required for a transaction/event, select "No
| SNo. | Particulars | Amount ($) | Amount ($) |
| Year 2021 |
Income Tax Expense A/c To Income Tax payment A/c To Deferred tax Liability A/c |
139300
|
130000 9300 |
| Year 2022 |
Income Tax Expense A/c Deferred tax Liability A/c To Income Tax payment A/c |
110000 4800
|
114800 |
| Year 2023 |
Income Tax Expense A/c Deferred tax Liability A/c To Income Tax payment A/c |
83750 3750
|
87500 |
| Year 2024 |
Income Tax Expense A/c Deferred tax Liability A/c To Income Tax payment A/c |
94750 750
|
95500 |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
