Example: XYZ Company makes a sale of $60$ in $2024$ that will be received from the customer by

installment payments.

For book purposes, following accrual accounting, all $60$ of this revenue is recognized in full

in $2024.$

For tax purposes, the company will recognize revenue only when receiving cash, which will

be $30$ in $2024,20$ in $2025,$ and $10$ in $2026.$

Assume for all years, the company earns $100$ of additional income that will be fully recognized for

both book and tax purposes. The applicable tax rate is $40\%.$ There is no preexisting DTL balance.

For $2024$: