Deferred Tax Liability: Revenue example
• Kicks USA began operations on February 1, 2021.
• When property is sold on an installment basis, Kicks USA recognizes
installment income for financial reporting purposes in the year of the sale.
• 2021 installment income was $880,000 and will be collected over the next
three years.
• Pretax accounting income for 2021 was $1,194,000.
Scheduled collections for 2022 - 2024 are as follows:
2022 $200,000
2023 470,000
2024 210,000
Required:
1) Prepare income tax table
2) Prepare journal entry to record income taxes for 2021
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