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Yebi Corp began operations in December 2024. Yebi builds and sells warehouses under the installment method. When warehouses are sold, Yebi recognizes income for financial
Yebi Corp began operations in December 2024. Yebi builds and sells warehouses under the installment method. When warehouses are sold, Yebi recognizes income for financial reporting purposes. Installment income recognized for financial reporting purposes in 2024 was $28 million, which will be coliected over the next three years. Scheduled collections for 2025-2027 are as follows: Pretax accounting income for 2024 was $38 million. The enacted tax rate is 45%. Required: 1. Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in 2024. 2. Suppose a new tax law, revising the tax rate from 45% to 40%, beginning in 2026 , is enacted in 2025 , when pretax accounting income was $32 million. There were no sales resulting in temporary differences in 2025 . Prepare the appropriate journal entry to record income taxes in 2025. 3. If the new tax rate had not been enacted, what would have been the appropriate balance in the deferred tax liability account at the end of 2025 ? Complete this question by entering your answers in the tabs below. Assuming no differences between accounting income and taxable income other than those described above, prepare the fournal entry to record income taxes in 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5,5)
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