The DeVille Company reported pretax accounting income on its income statement as follows: 2024 $ 435,000 355,000 2025 2026 2027 425,000 465,000 Included in the income of 2024 was an installment sale of property in the amount of $64,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $25,600 in 2025, $32,000 in 2026, and $6,400 in 2027. Included in the 2026 income was $27,000 interest from investments in municipal governmental bonds. The enacted tax rate for 2024 and 2025 was 40%, but during 2025, new tax legislation was passed reducing the tax rate to 25% for the years 2026 and beyond. Required: Prepare the year-end journal entries to record income taxes for the years 2024-2027. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
The DeVille Company reported pretax accounting income on its income statement as follows: 2024 $ 435,000 355,000 2025 2026 2027 425,000 465,000 Included in the income of 2024 was an installment sale of property in the amount of $64,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $25,600 in 2025, $32,000 in 2026, and $6,400 in 2027. Included in the 2026 income was $27,000 interest from investments in municipal governmental bonds. The enacted tax rate for 2024 and 2025 was 40%, but during 2025, new tax legislation was passed reducing the tax rate to 25% for the years 2026 and beyond. Required: Prepare the year-end journal entries to record income taxes for the years 2024-2027. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The DeVille Company reported pretax accounting income on its income statement as follows:
2024
2025
2026
$ 435,000
2027
355,000
425,000
465,000
Included in the income of 2024 was an installment sale of property in the amount of $64,000. However, for tax purposes, DeVille
reported the income in the year cash was collected. Cash collected on the installment sale was $25,600 in 2025, $32,000 in 2026,
and $6,400 in 2027.
Included in the 2026 income was $27,000 interest from investments in municipal governmental bonds.
The enacted tax rate for 2024 and 2025 was 40%, but during 2025, new tax legislation was passed reducing the tax rate to 25% for
the years 2026 and beyond.
Required:
Prepare the year-end journal entries to record income taxes for the years 2024-2027.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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