Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engagement,...

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Accounting

Alsup Consulting sometimes performs services for which itreceives payment at the conclusion of the engagement, up to sixmonths after services commence. Alsup recognizes service revenuefor 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 for2017â€“2020 are as follows:
Service Revenue Collections Pretax Accounting
Income
2017 $ 616,000 $ 581,000 $ 140,000
2018 700,000 710,000 205,000
2019 665,000 645,000 175,000
2020 650,000 675,000 155,000

There are no differences between accounting income and taxableincome other than the temporary difference described above. Theenacted tax rate for each year is 40%.

(Hint: You may find it helpful to prepare a schedule that shows thebalances in service revenue receivable at December 31,2017â€“2020.)
Journal entry worksheet:
Record 2018 income taxes.
Record 2019 income taxes.
Record 2020 income taxes.

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ALSUP Consulting Year 2017 Pretax accounting income 140000 Less Service Revenue 616000 Add Cash Collection 581000 Taxable Income 105000 Journal Entry 2017 Particular Amount Dr Amount Cr Tax Expense 56000 Deferred Tax See Answer

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	Service Revenue	Collections	Pretax Accounting Income
2017	$	616,000		$	581,000	$	140,000
2018		700,000			710,000		205,000
2019		665,000			645,000		175,000
2020		650,000			675,000		155,000