Question

Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engagement, up to six months after services commence. Alsup recognizes service revenue for financial reporting purposes when the services are performed. For tax purposes, revenue is reported when fees are collected. Service revenue, collections, and pretax accounting income for 2017–2020 are as follows:

	Service Revenue			Collections			Pretax Accounting Income
2017	$	687,000		$	662,000		$	230,000
2018		790,000			795,000			295,000
2019		755,000			725,000			265,000
2020		740,000			760,000			245,000

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 40%.

(Hint: You may find it helpful to prepare a schedule that shows the balances in service revenue receivable at December 31, 2017–2020.)

Required:
1. Prepare the appropriate journal entry to record Alsup's 2018 income taxes, Alsup’s 2019 income taxes and Alsup’s 2020 income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands.)

Record 2018,2019,2020and income taxes

Answer 1

Hi

Let me know in case you face any issue: For part a (e.g 2018), working for 2017 has been shown first: