Adam's Adorable Creations Company provided the following financial information for its installment sales for the current year.

Financial Data:

Installment sales for current year.......................$3,000,000

Cost of goods sold on installment basis.............. $1,500,000

Repossessed merchandise: Estimated value.............$18,000

Repossessed merchandise: Unpaid balances............$65,000

Payments by customers.................................$2,000,000

Required:

a) Prepare journal entries for the end of the year based on the information above.

b) Prepare the entry to record the gross profit realized in the current year.

(TCO B) The Accent Corporation shows the following information.

On January 1, 2012, Accent purchased a donut machine for $700,000.

A) Pretax financial income is $2,300,000 in 2012 and $2,400,000 in 2013.

B) Taxable income is expected in future years with an expected tax rate of 35%.

C) The company recognized an extraordinary gain of $150,000 in 2013 (which is fully taxable).

D) Tax-exempt municipal bonds yielded interest of $150,000 in 2013.

E) Straight-line basis for 7 years for financial reporting (See Appendix 11A.)

F) Half-year convention basis depreciation for 4 years for tax purposes.

Required:

1) Compute taxable income and income taxes payable for 2013.

2) Prepare the journal entries for income tax expense, income taxes payable, and deferred taxes for 2013.

3) Prepare the deferred income taxes presentation for December 31, 2013 balance sheet.