4 8 1 Problem 1 TTD-AR) 2 ABC's tax accounting methods and GAAP accounting methods are the same except for the method used to account for carned but uncollected service revenues. Per GAAP, ABC accrues these revenues (debit accounts receivable, credit sales revenue). Per tax rules, ABC is taxed on these revenues when the 5 customer pays on account. In other words, services revenues are recognized on the accrual basis for 6 GAAP and the cash basis for tax 2 ABC reports pretax GAAP earnings of $100,000 for the 12 months ended December 31, 2020. ABC's 9 accounts receivable (relating to accrued service revenues) was $20,000 at December 31, 2019 and $30,000 at December 31, 2020. Embedded in pretax GAAP earnings is interest revenue of $2,000 earned 10 pn bonds issued by the State of Texas. 11 1 Required 14 1. Prepare the entries needed to record current and deferred income taxes at December 31, 2020. Assume 15 21% corporate tax rate. 16 17 Enter your entries below. Choose the account from the drop-down list in the yellow cell Enter the amount of the entry in the green box 18 19 Account Debit Credit 20 21 22 23 1 1 1 1 1 24 25 26 27 inter your answer to the following question in the green box 28 What amount of net locome will be reported on the 2020 income statement? 29 10 2. Redouming thats new tax law passed during 2020 changed income tax rates to 25% for fiscal 11 years beginning of January 1, 2021 12 They tries below. Choose the from the drop down list in the yellow cell. Enter the amount of the entry in the green box, ACE Debit Credit 2 2 2 2 2 2 Who will be on the 2020 statement Columni 2 A C 5 Columni Deferred Income tax asset (Bal. Sht) Deferred income tax asset valuation allowance (Bal. Sht) Deferred income tax liability (Bal.Sht) Income tax payable (Bal.Sht) Liability for uncertain tax position (Bal. Sht) Income tax expense (Inc. Stmt) TE