Revenue Recognition 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: PROBLEM #1:

Initial Year of installment sale 20X2 Book Tax 20X2 (book 248,000$) (tax $-) 20X3 (tax 50%) 20X4 (tax 50%) Tax Rate 20% Book Income 20X2 387,000$ 20X3 39,427$ 20X4 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.

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:

8.) Compute net income after taxes for 20X3.

9.) Calculate taxable income for 20X4.

10.) Compute net income after taxes for 20X4.