Jubong premium beds sells beds to its customers who purchase beds on the installment basis make payments in equal monthly installments over a two-year period, with no down payment required. Its gross profit on installment sales equals 40% of the selling price of the beds. For financial accounting purposes, sales revenue is recognized at the time the sale is made. For income tax purposes, however, the installment method is used. There are no other book and income tax accounting differences, income tax rate is 30%. If December 31, 2021, balance sheet includes a deferred tax liability of 600,000 arising from the difference between book and tax treatment of the installment sales, it should also include installment accounts receivable of?

Jubong premium beds sells beds to its customers who purchase beds on the installment basis make payments in equal monthly installments over a two-year period, with no down payment required. Its gross profit on installment sales equals 40% of the selling price of the beds. For financial accounting purposes, sales revenue is recognized at the time the sale is made. For income tax purposes, however, the installment method is used. There are no other book and income tax accounting differences, income tax rate is 30%. If December 31, 2021, balance sheet includes a deferred tax liability of 600,000 arising from the difference between book and tax treatment of the installment sales, it should also include installment accounts receivable of?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 1P

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