The DeVille Company reported pretax accounting income on its income statement as follows: 2018...........................$350,000 2019.............................270,000 2020.............................340,000 2021.............................380,000
Question:
2018...........................$350,000
2019.............................270,000
2020.............................340,000
2021.............................380,000
Included in the income of 2018 was an installment sale of property in the amount of $50,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $20,000 in 2019, $25,000 in 2020, and $5,000 in 2021.
Included in the 2020 income was $15,000 interest from investments in municipal bonds.
The enacted tax rate for 2018 and 2019 was 30%, but during 2019, new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond.
Required:
Prepare the year-end journal entries to record income taxes for the years 2018-2021.
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Related Book For
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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