Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engage- ment, up to six months after services commence. Alsup recognizes service revenue for financial reporting pur- poses when the services are performed. For tax purposes, revenue is reported when fees are collected. Service revenue, collections, and pretax accounting income for 2015-2018 are as follows: Pretax Accounting Collections Service Revenue Income $650,000 750,000 $620,000 $186,000 2015 2016 770,000 250,000 2017 715,000 700,000 220,000 2018 700,000 720,000 200,000 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 40%. Required: 1. Prepare the appropriate journal entry to record Alsup's 2016 income taxes. 2. Prepare the appropriate journal entry to record Alsup's 2017 income taxes. 3. Prepare the appropriate journal entry to record Alsup's 2018 income taxes. (Hint: You may find it helpful to prepare a schedule that shows the balances in service revenue receivable at December 31, 2015–2018.)

Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engage- ment, up to six months after services commence. Alsup recognizes service revenue for financial reporting pur- poses when the services are performed. For tax purposes, revenue is reported when fees are collected. Service revenue, collections, and pretax accounting income for 2015-2018 are as follows: Pretax Accounting Collections Service Revenue Income $650,000 750,000 $620,000 $186,000 2015 2016 770,000 250,000 2017 715,000 700,000 220,000 2018 700,000 720,000 200,000 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 40%. Required: 1. Prepare the appropriate journal entry to record Alsup's 2016 income taxes. 2. Prepare the appropriate journal entry to record Alsup's 2017 income taxes. 3. Prepare the appropriate journal entry to record Alsup's 2018 income taxes. (Hint: You may find it helpful to prepare a schedule that shows the balances in service revenue receivable at December 31, 2015–2018.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 69E: Unearned Revenue Jennifers Landscaping Services signed a $400-per-month contract on November 1,...

See similar textbooks

Similar questions

On July 1, a client paid an advance payment (retainer) of $10,000, to cover future legal services. During the period, the company completed $6,200 of the agreed-on services for the client. There was no beginning balance in the Unearned Revenue account for the period. Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment
On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services. During the period, the company completed $3,500 of the agreed-on services for the client. There was no beginning balance in the Unearned Revenue account for the period. Based on the information provided, A. Make the December 31 adjusting journal entry to bring the balances to correct. B. Show the impact that these transactions had.
Assume that a lawyer bills her clients $15000 on June 30, for services rendered during June. The lawyer collects $8500 of the billings during July and the remainder in August. Under the accrual basis of accounting, when would the lawyer record the revenue for the fees? A. June, $15,000; July, $0; and August, $0 B. June, $0; July, $6,500; and August, $8,500 C. June, $8,500; July, $6,500; and August, $0 D. June, $0; July, $8,500; and August, $6,500
Unearned Revenue Jennifers Landscaping Services signed a $400-per-month contract on November 1, 2019, to provide plant watering services for Lola Inc.s office buildings. Jennifers received 4 months' service fees in advance on signing the contract. Required: 1. Prepare Jennifers journal entry to record the cash receipt for the first 4 months. 2. Prepare Jennifers adjusting entry at December 31, 2019. 3. CONCEPTUAL CONNECTION How would the advance payment (account(s) and amounts(s)] be reported in Jennifers December 31, 2019, balance sheet? How would the advance payment [account(s) and amount(s)] be reported in Lolas December 31, 2019, balance sheet?
Identify whether each of the following transactions, which are related to revenue recognition, are accrual, deferral, or neither. A. provided legal services to client, who paid at the time of service B. received cash for legal services performed last month C. received cash from clients for future services to be provided D. provided legal services to client, to be collected next month
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: Service Revenue Collections Pretax AccountingIncome 2020 $ 660,000 $ 620,000 $ 186,000 2021 750,000 778,000 260,000 2022 710,000 702,000 228,000 2023 716,000 720,000 200,000 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…
Packer Wings Company received an advance payment of $144,000 for a consulting contract during the year. The balance in the Unearned Consulting Fees account at the beginning of the year was $12,000. At the end of the year, $8,000 was still unearned. Create T-accounts for the accounts involved in the adjusting entry needed at year end, and post all amounts to them, including the adjusting entry necessary, and calculate the account balances. How much will Packer Wings report as Consulting Revenue on its income statement for the year? I need quick answer
On May 1, 2018,Varga Tech Services signed a $6,000 consulting contract with Shaffer Holdings. The contractrequires Varga to provide computer technology support services whenever requested over the period fromMay 1, 2018, to April 30, 2019, with Shaffer paying the entire $6,000 on May 1, 2018. How much revenueshould Varga recognize in 2018?
During the first month of operations, the following transactions occurred for Blossom Inc.: To record Salary To record payment of income tax
On May 1, a company with a July 31 fiscal year-end receives an advance payment of $24,000 from a customer for services to be rendered to a client evenly over the following 12 months. Prepare the journal entry for the May 1 transaction AND the appropriate adjusting journal entry that would be needed at the end of the fiscal year.
Fedora’s Vases experienced all of the following events during the month of September 2020. For each transaction, give the correct amount of revenue and expense to be recognized. If nothing should be recognized, enter 0 for your answer. Paid employees $96,000 for work performed during the months of August and September. Half of the work relates to September 2020. Revenue recognized: Expense recognized: