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 2017-2020 are as follows:

 

                           Service Revenue                       Collections                          Pretax Accounting Income

2017                             $ 674,000                            $ 644,000                                             $ 210,000

2018                                770,000                               785,000                                               275,000

2019                                735,000                               710,000                                              245,000

2020                                720,000                               750,000                                              225,000          

 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 2018 income taxes, Alsup's 2019 income taxes and Alsup's 2020 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 thousands.)

Answer rating: 100% (QA)

Required Journal Entries 1 2018 Income Taxes Debit Income Tax Expense 40 785000 770000 6000 Credit D... View the full answer