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: Pretax 2020 2021 2022 2023 Service Revenue $668,000 758,000 718,000 724,000 Collections $628,000 786,000 710,000 728,000 Accounting Income $194,000 268,000 236,000 208,000 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.)
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: Pretax 2020 2021 2022 2023 Service Revenue $668,000 758,000 718,000 724,000 Collections $628,000 786,000 710,000 728,000 Accounting Income $194,000 268,000 236,000 208,000 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.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 16E: Dudley Company failed to recognize the following accruals. It also recorded the prepaid expenses and...
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Transcribed Image Text:X:
1 Record 2021 income taxes.
2 Record 2022 income taxes.
3 Record 2023 income taxes.
Transcribed Image Text: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:
Pretax
Accounting
Income
Service
Revenue
$668,000
758,000
718,000
724,000
Collections
$628,000
786,000
710,000
728,000
$194,000
268,000
236,000
208,000
2020
2021
2022
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.)
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