Question

RECORD INCOME TAXES FOR 2022 AND AN ENTRY FOR 2023

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 2020-2023 are as follows: 2020 2021 2022 Service Revenue $688,000 778,000 738,000 744,000 Collections $648,000 806,000 730,000 748,000 Pretax Accounting Income $ 214,000 288,000 256,000 228,000 2023 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 25%. (Hint: You will find it helpful to prepare a schedule that shows the balances in service revenue receivable at December 31, 2020- 2023.) Required: 1. to 3. Prepare the appropriate journal entries to record Alsup's 2021 income taxes, 2022 income taxes and 2023 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 whole dollars.) View transaction list Journal entry worksheet 1 2 3 > Record 2021 income taxes. Note: Enter debits before credits. Event General Journal Debit Credit 1

Answer 1

and tax payable Computakoo of taxable income for each year as follows: paskculas 2021 2022 2023 $ 288000 pretex Accounting Wood $256000 $228000 (t) collections $748000 $730000 $ 806000 ( Seovile revenue ($778000) (#738000) (8744000) Taxable income $ 316000 $24 8000 $232000 Income tax rate 25°/ 25.1. 25-1. Jax payable $58000 $ 79000 $62000 ($316000x25:)) (4248000 x 25.1.) († 23 2000 xas :))

Journal Entries Date Debit Credit particulars Income tax expense 31.12.2021 $ 72000 $7000 Deferred tax liability ($ 806000 - $778000) x 25). Income tax payable $ 79000 (to record income tax expene) 31.12.2022 Income tax expense $ 64000 Deferred tax liability $ 2000 ($730000 - 3738000) x 25). Income tax payable $62000 (to record income tax Expene) Income tax Expense $57000 31-12-2023 $ 1000 Detewed too liability C$48000 - 744000)x2) Income tax payable $58000 (to record income tax expene)