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Dixon Development began operations in December 2018. When lots for industrial development are sold, Dixon recognizes income for financial reporting purposes in the year of the sale. For some lots, Dixon recognizes income for tax purposes when collected. Income recognized for financial reporting purposes in 2018 for lots sold this way was $25 million, which will be collected over the next three years. Scheduled collections for 2019-2021 are as follows: 2019 9 million 2020 12 million 2821 4 i11ion $ 25 million Pretax accounting income for 2018 was $34 million. The enacted tax rate is 40%. Required 1. Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in 2018. 2. Suppose a new tax law, revising the tax rate from 40% to 35%, beginning in 2020, is enacted in 2019, when pretax accounting income was $28 million. No 2019 lot sales qualified for the special tax treatment. Prepare the appropriate journal entry to record income taxes in 2019. 3. If the new tax rate had not been enacted, what would have been the appropriate balance in the deferred tax liability account at the end of 2019? Complete this question by entering your answers in the tabs below. KPrey 13 of 15Next>

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