Case Development began operations in December 2021. When property is sold on an installment basis, Caserecognizes installment income for financial reporting purposes in the year of the sale. For tax purposes, installmentincome is reported by the installment method. 2021 installment income was $600,000 and will be collected overthe next three years. Scheduled collections and enacted tax rates for 2022?2024 are as follows:

Pretax accounting income for 2021 was $810,000, which includes interest revenue of $10,000 from municipal governmental bonds. The enacted tax rate for 2021 is 20%.

Required:1. Assuming no differences between accounting income and taxable income other than those described above, prepare the appropriate journal entry to record Case?s 2021 income taxes.2. What is Case?s 2021 net income?

Transcribed Image Text:

$140,000 2022 20% 25 25 2023 260,000 2024 200,000