The Sirap Co had sales for the year at $150000. Only $105000 was collected in cash, The remaining $45000 should be collected in cash next year. The income is not taxable until it is collected in cash. The only expense for the business in income tax and the rate is 25% for this year and in all future years. how do you Make all journal entries necessary to record income tax for the year. ?

A journal entry is made to record the financial transactions in the books of accounts.There are 2 types of sales, cash sales and credit sales.Cash sales is when cash is collected immediately after sales. In case of a credit sale, the customer is given an option to make payment for the sale within a specified time period and not immediately. It is a competitive market practice and increases the sale value. Such customers are assets to the company and known as Accounts Receivable.. A loss in accounts receivable i.e. bad debt is incurred when the customer does not pay the full amount due by him.Computation of Income Tax ExpenseFormula:Computation:Journal Entries

Answered: The Sirap Co had sales for the year at…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

100%

The Sirap Co had sales for the year at $150000. Only $105000 was collected in cash, The remaining $45000 should be collected in cash next year. The income is not taxable until it is collected in cash. The only expense for the business in income tax and the rate is 25% for this year and in all future years. how do you Make all journal entries necessary to record income tax for the year. ?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions