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The journal entries above are correct. I am having a hard time with the numbers for each year. Alsup Consulting sometimes performs services for which
The journal entries above are correct. I am having a hard time with the numbers for each year.
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 2017-2020 are as follows: 2017 2018 2019 2020 Service Revenue $650,000 750,000 715,000 700,000 Collections $620,006 770,000 700,000 720,000 Pretax Accounting Income $186,000 250,000 220,000 200,800 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, 2017- 2020.) Required 1. to 3. Prepare the appropriate journal entries to record Alsup's 2018 income taxes, 2019 income taxes and 2020 income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands.)Step by Step Solution
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