Intermediate Accounting Chapter 16: For Credit KEY NAME: PROBLEM #1: Motown Corporation enters into an installment sale with Max Corporation in 20X2. Motown recognizes the sale on an accrual basis (when sale is complete) for book purposes and on an installment sale method (cash) basis for tax purposes Facts are as follows: Initial Year of installment sale 20X2 Revenue Recognition Book Tax 180,000 $ 20X2 20x3 20X4 Tax Rate 20% 20X2 20x3 20X4 Book Income 186,755 39,427 122,400 $ 1.) Calculate taxable income for 20X2 2.) Calculate taxes payable for 20X2 3.) Determine the current deferred tax liability at 12/31/X2. Page 1 of 2 4.) calculate total income tax expense for 20X2. 5.) Compute net income after taxes for 20x2. 6.) Calculate taxable income for 20X3. 7.) The entry required at the end of 20x3 requires: A. Debit to the Deferred tax liability for $ 7,885 B. Debit to the Deferred tax liability for $ 18,000 C. Debit to the Deferred tax liability for $ 25,885 D. Credit to the Deferred tax liability for $ 7,885 E. Credit to the Deferred tax liability for $ 18,000 F. Credit to the Deferred tax liability for $ 25,885 G. None of the above 8.) Compute net income after taxes for 20X3. 9.) Calculate taxable income for 20X4. 10.) Compute net income after taxes for 20X4