Question: : Potter Consulting performs services for which it receives payment 60 days after completion of the consulting service. Potter recognizes revenue for financial accounting purposes

: Potter Consulting performs services for which it receives payment 60 days after completion of the consulting service. Potter recognizes revenue for financial accounting purposes when the work is performed; while Potter recognizes revenue for tax purposes when the cash is collected. Service revenue, collections and pre-tax accounting income for 2021, 2022, 2023 and 2024 are as follows:

Year: Service revenue collections Accounting pre-tax income

2021 $660,000 $620,000 $186,000

2022 $750,000 $778,000 $260,000

2023 $710,000 $702,000 $228,000

2024 $716,000 $700,000 $200,000

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 25%.

REQUIRED: Prepare Potters journal entry for taxes in:

2022
2023
2024

journal entry for taxes in:

2022
2023
2024

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