Tru Developers, Inc., sells plots of land for industrial development. Tru recognizes income for financial reporting purposes in the year it sells the plots. For some of the plots sold this year, Tru took the position that it could recognize the income for tax purposes when the installments are collected. Income that Tru recognized for financial reporting purposes in 2021 for plots in this category was $60 million. The company expected to collect 60% of each sale in 2022 and 40% in 2023. This amount over the next two years is as follows: 2022 $ 36 million 2023 24 million $ 60 million

Tru's pretax accounting income for 2021 was $105 million. In its income statement, Tru reported interest income of $15 million, unrelated to the land sales, for which the company's position is that the interest is not taxable. Accordingly, the interest was not reported on the tax return. There are no differences between accounting income and taxable income other than those described above. The enacted tax rate is 40 percent.

Management believes the tax position taken on the land sales has a greater than 50% chance of being upheld based on its technical merits, but the position taken on the interest has a less than 50% chance of being upheld. It is further believed that the following likelihood percentages apply to the tax treatment of the land sales ($ in millions):

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Tru Developers, Inc., selle plots of land for Industrial development. The recognizes income for financial reporting purposes in the year it sells the plots. For some of the plots told this year, Tru took the position that could recognize the income for tax purposes when the Installments are collected. Income that Tru recognized for financial reporting purposes in 2021 for plots in this category was $60 million. The company expected to collect 60% of each sale in 2022 and 20% in 2022. This amount over the next two years as follows: 2022 2013 $36 Will 24 million $68 lion Tru's pretax accounting income for 2021 was $105 million. In its Income statement Tru reported interest income of $15 million unrelated to the land sales, for which the company's poston te that the interest is not table. Accordingly, the interest was not reported on the tax retum. There are no differences between accounting income and taxable income other than those described above. The enacted to intes 40 percent Manngement believes the tax position taken on the land sales has greater than 50% chance of being upheld based on its technical merts, but the position taken on the Interest has less than 50% chance of being upheld. It is further believed that the following Iskelihood percentages apply to the tax treatment of the land sales is in milions our lifying for Porce that want Sales Tak Test Stand $ 50 40 2 30 20 2 Required: 1. What portion of the tax benefit of taxfree interest will tre recognize on 2021 tax retum 2. What portion of the tax benefit of taxfree Interest wil Tu recognize on 2021 Financial statements 3-o. What portion of the tax on the $60 milion income from the plats sold on an intiment basiswi Tru celeront 2021 tsk return 3-b. What portion of the tax on the 560 million income from the pots sold on ment bass will ruchows a deferred tax asset or ability in its 2021 financial statements 4. Prepare the journal entry to record income taxes a 2021, assuming full recognition of the tax benefits in the financial statements of both differences between pretex accounting income and table income 5. Prepare the journal entry to record income taxes 2024 assoming the canton of the tax benefits in the finance statements you indicated ments 1-3 Answer is not complete Complete this question by entering your answers in the tabs belon. Prepare the real entry to concome taxes in the recoon on the tax belts in the Financial statements you indicated in ourements. They receitor anonim on the others in the bottom NO Tractor Genom Det Credit lololo income 122 Complete this question by entering your answers in the tabs below. Req 1 to 3 Req4 Req 5 What portion of the tax benefit of tax-free interest will Tru recognize on its 2021 tax return and fina portion of the tax on the $60 million income from the plots sold on an installment basis will Tru defe and deferred tax asset or liability in its 2021 financial statements? (Enter your answers in millions entered as 10).) $ 1 Tax benefit recognized 2 Tax benefit recognized 3a Amount deferred 3b Deferred tax liability 6 million o million 24 million $ 16 million Req i to a Reqs Reg 4 hos Prepare the journal entry to record income taxes in 2021, assuming full recognition of the tax benefits in the financial statements of both differences between pretax accounting income and taxable income. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in millions ().e., 10,000,000 should be entered as 10).) Show less View transaction line View journal entry worksheet No Transaction Debit Credit 1 1 36 General Journal income tax expense Deferred tax liability Income taxes payable 24 12 Req 1 to 3 Rego Req 1 to 3 Reg 4 Reqs Prepare the journal entry to record income taxes in 2021, assuming the recognition of the tax benefits in the financial statements you indicated in requirements 1-3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (I... 10,000,000 should be entered as 10).) No Transaction General Journal Debit Credit 1 1 income tax expense Deferred tax liability Income taxes payable 12