Question
The DeVille Company reported pretax accounting income on its income statement as follows: 2024 $ 395,000 2025 315,000 2026 385,000 2027 425,000 Included in the
The DeVille Company reported pretax accounting income on its income statement as follows:
| 2024 | $ 395,000 |
|---|---|
| 2025 | 315,000 |
| 2026 | 385,000 |
| 2027 | 425,000 |
Included in the income of 2024 was an installment sale of property in the amount of $46,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $18,400 in 2025, $23,000 in 2026, and $4,600 in 2027.
Included in the 2026 income was $19,000 interest from investments in municipal governmental bonds.
The enacted tax rate for 2024 and 2025 was 40%, but during 2025, new tax legislation was passed reducing the tax rate to 25% for the years 2026 and beyond.
Required:
Prepare the year-end journal entries to record income taxes for the years 20242027.
Record 2024 income taxes. Note: Enter debits before credits. Record 2025 income taxes. Note: Enter debits before credits. Record 2026 income taxes. Note: Enter debits before credits. Record 2027 income taxes. Note: Enter debits before credits Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Accounting
Authors: Alan Melville
2nd Edition
0273634399, 978-0273634393
