In: Accounting
The DeVille Company reported pretax accounting income on its
income statement as follows:
2018 | $ | 360,000 | |
2019 | 280,000 | ||
2020 | 350,000 | ||
2021 | 390,000 | ||
Included in the income of 2018 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 2019, $16,000 in 2020, and
$3,200 in 2021.
Included in the 2020 income was $11,000 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.