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Tru Developers, Incorporated, sells plots of land for industrial development. Tru recognizes income for financial reporting purposes in Complete this question by entering your answers
Tru Developers, Incorporated, sells plots of land for industrial development. Tru recognizes income for financial reporting purposes in Complete this question by entering your answers in the tabs below.
Req to
to What portion of the tax benefit of taxfree interest will Tru recognize on its tax return and financial statements?
What portion of the tax on the $ million income from the plots sold on an installment basis will Tru defer on its tax
return and deferred tax asset or liability in its financial statements?
Note: Enter your answers in millions ie should be entered as Complete this question by entering your answers in the tabs below.
Req to
Prepare the journal entry to record income taxes in assuming full recognition of the tax benefits in the financial statements of both
differences between pretax accounting income and taxable income.
Note: If no entry is required for a transactionevent select No journal entry required" in the first account field. Enter your answers in
millions ie should be entered as Req
Prepare the journal entry to record income taxes in assuming the recognition of the tax benefits in the financial statements you
indicated in requirements
Note: If no entry is required for a transactionevent select No journal entry required" in the first account field. Enter your answers in
millions ie should be entered as
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 for plots in this category was
$ million. The company expected to collect of each sale in and in This amount over the next two years is as
follows:
Tru's pretax accounting income for was $ million. In its income statement, Tru reported interest income of $ 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 percent.
Management believes the tax position taken on the land sales has a greater than chance of being upheld based on its technical
merits, but the position taken on the interest has a less than chance of being upheld. It is further believed that the following
likelihood percentages apply to the tax treatment of the land sales $ in millions:
Required:
What portion of the tax benefit of taxfree interest will Tru recognize on its tax return?
What portion of the tax benefit of taxfree interest will Tru recognize on its financial statements?
a What portion of the tax on the $ million income from the plots sold on an installment basis will Tru defer on its tax return?
b What portion of the tax on the $ million income from the plots sold on an installment basis will Tru show as a deferred tax asset
or liability in its financial statements?
Prepare the journal entry to record income taxes in assuming full recognition of the tax benefits in the financial statements of
both differences between pretax accounting income and taxable income.
Prepare the journal entry to record income taxes in assuming the recognition of the tax benefits in the financial statements
you indicated in requirements
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