Reference no: EM132487209
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 2020-2023 are as follows:
Service Revenue . Collections . Pretax Accounting Income
2020 $740,000 $700,000 $266,000
2021 830,000 858,000 340,000
2022 790,000 782,000 308,000
2023 796,000 800,000 280,000
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 25%.
Required:
Question 1: Prepare the appropriate journal entries to record Alsup's 2021 income taxes, 2022 income taxes and 2023 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 (e.g. 150,000 should be entered as 150).)