Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

CHAPTER 16 (10.) Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engagement, up to six months after services

CHAPTER 16 (10.)

Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engagement, up to six months after services commence. Alsup recognizes service revenue for financial reporting purposes when the services are performed. For tax purposes, revenue is reported when fees are collected. Service revenue, collections, and pretax accounting income for 20172020 are as follows:

Service Revenue Collections Pretax Accounting Income
2017 $ 624,000 $ 599,000 $ 160,000
2018 720,000 730,000 225,000
2019 685,000 660,000 195,000
2020 670,000 690,000 175,000

There are no differences between accounting income and taxable income other than the temporary difference described above. The enacted tax rate for each year is 40%. (Hint: You may find it helpful to prepare a schedule that shows the balances in service revenue receivable at December 31, 20172020.) Required: 1. Prepare the appropriate journal entry to record Alsup's 2018 income taxes, Alsups 2019 income taxes and Alsups 2020 income taxes.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of IT Audit For Operational Auditors

Authors: Timothy McWilliams

1st Edition

1634541332, 978-1634541336

More Books

Students also viewed these Accounting questions

Question

I had a problem last week; they would think I am picky or a whiner!

Answered: 1 week ago