Appropriate journal entry to record case

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Reference no: EM13256456

Case development began Operations in December 2009. Whenproperty is sold on an installment basis, Case recognizesinstallment income for financial reporting purposes in the year ofthe sale. For tax purpuses intallment income in reported bythe installment method. 2009 installment income was $600,000and will be collected over the next three years 30% 2010 $150,000;40% 2011 $250,000 ; 40% 2012 $200,000. Case also had productwarranty cost of $80,000 expensed for financial reporting purposesin 2009. For tax purposes only $20,000 of warranty costsactually paid in 2009 was deducted. The remaining will de deductedfor tax purposes in 2010 $20,000; 2011 $25,000 and 2012$15,000. Pretax accounting income for 2009 was $810,000,which includes interest revenue of $10,000 for municipalbonds. The enacted tax rate for 2009 is 30%.

1. Assuming no differences between accounting and taxable income other than those described above, prepare the appropriate journal entry to record Case's 2009 income taxes.

2. What is Case's 2009 net income?

3. How should the deferred tax amounts be classifed in aclassifed balance sheet?

Reference no: EM13256456

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