Prepare appropriate journal entry to record silver income

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Reference no: EM132008597

Problem - Silver began operations in 2014. The company sometimes sells used warehouses on an installment basis. In those cases, Silver reports income in its income statement in the year of the sale. In its income tax return, though, Silver reports installment income by the installment method. Installment income in 2014 was $90,000, which Silver expects to collect equally over the next three years.

The tax rate is 30%, but based on an enacted law, is scheduled to become 35% in 2016.

Silver's pretax accounting income from the 2014 income statement was $830,000, which includes $40,000 of interest revenue from an investment in municipal bonds. There were no differences between accounting income and taxable income other than those described above.

Required:

(1) Prepare the appropriate journal entry to record Silver's 2014 income taxes. Show calculations.

(2) What is Silver's 2014 net income?

Reference no: EM132008597

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