Account Year 1 GAAP $ 18,000 $ $ 3,800 Year 2 Tax GAAP 18,000 S 7,200 $ 0 Year 3 Tax GAAP 7,200 $ 6,700 S Tax 6,700 Sales Gross profit on installment sales Taxable portion of cash collected on installment sales 800 1,100 (500) 1,900 (1,600) (200) (200) Operating expenses (500) 6,700 (1,600) 5,100 $ 21,600 $ Income before tax Taxable income $ 7,800 $ 18,600 x 35% x 35% 7.000 x 35% 2.450 Tax rate 2,730 $ 6,510 Tax payable Print Done Johnson Construction Equipment Manufacturers engaged in an installment sale with one of its major customers. The firm negotiated the terms of the installment sale for a specialized piece of equipment, full payment is required within 3 years. We present information related to Johnson's first 3 years of operation !!! (Click the icon to view the data.) Read the requirements Account Year 1 GAAP $ 18,000 $ $ 3,800 Year 2 Tax GAAP 18,000 S 7,200 $ 0 Year 3 Tax GAAP 7,200 $ 6,700 S Tax 6,700 Sales Gross profit on installment sales Taxable portion of cash collected on installment sales 800 1,100 (500) 1,900 (1,600) (200) (200) Operating expenses (500) 6,700 (1,600) 5,100 $ 21,600 $ Income before tax Taxable income $ 7,800 $ 18,600 x 35% x 35% 7.000 x 35% 2.450 Tax rate 2,730 $ 6,510 Tax payable Print Done Johnson Construction Equipment Manufacturers engaged in an installment sale with one of its major customers. The firm negotiated the terms of the installment sale for a specialized piece of equipment, full payment is required within 3 years. We present information related to Johnson's first 3 years of operation !!! (Click the icon to view the data.) Read the requirements