Solution:
Computation of Taxable Income and Income Tax Payable | ||||
Particulars | 2021 | 2022 | 2023 | 2024 |
Pretax accounting income | $3,90,000.00 | $3,10,000.00 | $3,80,000.00 | $4,20,000.00 |
Less: Income from installment sale property | -$44,000.00 | $0.00 | $0.00 | $0.00 |
Add: Collection of installment sales | $0.00 | $17,600.00 | $22,000.00 | $4,400.00 |
Less: Interest on municipal bonds | $0.00 | $0.00 | -$18,000.00 | $0.00 |
Taxable Income | $3,46,000.00 | $3,27,600.00 | $3,84,000.00 | $4,24,400.00 |
Income Tax Payable | $1,38,400.00 | $1,31,040.00 | $96,000.00 | $1,06,100.00 |
Computation of Deferred Tax | ||||
Particulars | 2021 | 2022 | 2023 | 2024 |
Collection of installment sale as per tax return | $0.00 | $17,600.00 | $22,000.00 | $4,400.00 |
Income from installment sales as per books | $44,000.00 | $0.00 | $0.00 | $0.00 |
Taxable Temporary differences | $44,000.00 | $0.00 | $0.00 | $0.00 |
Reversible Temporary differences | -$17,600.00 | -$22,000.00 | -$4,400.00 | |
Deferred tax liability | $17,600.00 | |||
Reversal of Deferred tax liability 2022 = ($17600*40% + $26400*15%) 2023 - $22,000*25% 2024 - $4,400*25% |
$11,000.00 | $5,500.00 | $1,100.00 |
Journal Entries - Deville Company | |||
Year | Particulars | Debit | Credit |
2021 | Income Tax Expense Dr | $1,56,000.00 | |
To Income tax Payable | $1,38,400.00 | ||
To Deferred tax liability | $17,600.00 | ||
(To record income tax and deferred tax for 2021) | |||
2022 | Income Tax Expense Dr | $1,20,040.00 | |
Deferred tax liability Dr | $11,000.00 | ||
To Income tax Payable | $1,31,040.00 | ||
(To record income tax and deferred tax for 2022) | |||
2023 | Income Tax Expense Dr | $90,500.00 | |
Deferred tax liability Dr | $5,500.00 | ||
To Income tax Payable | $96,000.00 | ||
(To record income tax and deferred tax for 2023) | |||
2024 | Income Tax Expense Dr | $1,05,000.00 | |
Deferred tax liability Dr | $1,100.00 | ||
To Income tax Payable | $1,06,100.00 | ||
(To record income tax and deferred tax for 2024) |
12 The Deville Company reported pretax accounting income on its income statement as follows: 0.89 moints...
The DeVille Company reported pretax accounting income on its income statement as follows: 2021 $ 400,000 2022 320,000 2023 390,000 2024 430,000 Included in the income of 2021 was an installment sale of property in the amount of $48,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $19,200 in 2022, $24,000 in 2023, and $4,800 in 2024. Included in the 2023 income was $20,000 interest from investments...
The DeVille Company reported pretax accounting income on its income statement as follows: 2021 $ 370,000 2022 290,000 2023 360,000 2024 400,000 Included in the income of 2021 was an installment sale of property in the amount of $36,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $14,400 in 2022, $18,000 in 2023, and $3,600 in 2024. Included in the 2023 income was $13,000 interest from investments...
The Deville Company reported pretax accounting income on its income statement as follows: 2021 2022 $395,000 315,000 385,000 425,000 2024 Included in the income of 2021 was an installment sale of property in the amount of $46,000. However, for tax purposes, DeVille reported the income in the year cash was collected, Cash collected on the installment sale was $18.400 in 2022. $23,000 in 2023. and $4,600 in 2024. Included in the 2023 income was $19,000 interest from investments in municipal...
The DeVille Company reported pretax accounting income on its income statement as follows: 2021 2022 2023 2024 $360,000 280,000 350,000 390,000 Included in the income of 2021 was an installment sale of property in the amount of $32,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $12,800 in 2022, $16,000 in 2023, and $3,200 in 2024. Included in the 2023 income was $11,000 interest from investments in...
The DeVile Company reported pretax accounting income on its income statement as follows: 2021 2022 2023 2024 $360,000 200.000 350.000 390,000 Included in the income of 2021 was an installment sale of property in the amount of $32,000. However, for tax purposes, Deville reported the income in the year cash was collected. Cash collected on the installment sale was $12.800 in 2022. $16,000 in 2023, and $3.200 in 2024 Included in the 2023 income was $11,000 interest from investments in...
The Company reported pretax accounting income on its income statement as follows: 2021 $350,000 2022 270,000 2023 340,000 2024 380,000 Included in the income of 2021 was an installment sale of property in the amount of $50,000. However, for tax purposes, the Company reported the income in the year cash was collected. Cash collected on the installment sale was $20,000 in 2022, $25,000 in 2023, and $5,000 in 2024. Included in the 2023...
The DeVille Company reported pretax accounting Income on its Income statement as follows: $425,80e 2818 2819 2828 2821 345,808 415,888 455,e8 Included In the Income of 2018 was an Installment sale of property In the amount of $60,000. However, for tax purposes, DeVille reported the Income In the year cash was collected. Cash collected on the Installment sale was $24,000 In 2019, $30,000 In 2020, and $6,000 In 2021. Included In the 2020 Income was $25,000 Interest from Investments In...
The DeVille Company reported pretax accounting income on its income statement as follows: 2018 $ 425,000 2019 345,000 2020 415,000 2021 455,000 Included in the income of 2018 was an installment sale of property in the amount of $60,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $24,000 in 2019, $30,000 in 2020, and $6,000 in 2021. Included in the 2020 income was $25,000 interest from investments...
The DeVille Company reported pretax accounting income on its income statement as follows: 2018 2019 2020 2021 $365,000 285,000 355,000 395,000 Included in the income of 2018 was an installment sale of property in the amount of $34,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $13,600 in 2019, $17,000 in 2020, and $3,400 in 2021. Included in the 2020 income was $12,000 interest from investments in...
The DeVille Company reported pretax accounting income on its income statement as follows: 2018 2019 2020 2021 $395,000 315,000 385,000 425,000 Included in the income of 2018 was an installment sale of property in the amount of $46,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $18,400 in 2019, $23,000 in 2020, and $4,600 in 2021 Included in the 2020 income was $19,000 interest from investments in...