Chapter 18, Problem 69P

Ven Company is a retailer. In 2018, its before-tax net income for financial reporting purposes was $600,000. This included a $150,000 gain from the sale of land held for several years as a possible plant site. The cost of the land was $100,000, the contract price for the sale was $250,000, and the company collected $120,000 in the year of sale. The income per books also included $90,000 from a 24-month service contract entered into in July 2017 (the customer paid $180,000 in advance for this contract). The addition to the allowance for uncollectible accounts for the year was $70,000, and the actual accounts written off totaled $40,000.

Make the necessary adjustments to the before taxable income per books to compute the taxable income for the year.