Problem 14 ABC began operations 1/1/2020. At 12/31/2020, ABC prepared the following year-end AJEs to...
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Problem 14 ABC began operations 1/1/2020. At 12/31/2020, ABC prepared the following year-end AJEs to recognize current and deferred income taxes. Income tax expense 21,000 Income tax payable 21,000 6,300 Income tax expense Deferred income tax liability 6,300 The deferred income tax liability arose from a taxable temporary difference attributable to earned but un collected revenues. For GAAP, these earned but uncollected revenues are accrued (debit accounts receivable, credit sales) but for tax these revenues aren't taxable until the customer makes payment. Assume a 21% tax rate in the current and all future years. Required 1. What must have been the 2020 taxable income? 2. What must have been the 12/31/2020 balance in accounts receivable? Enter your answers in the appropriate green box: 2020 taxable income was: 1 12/31/2020 balance in accounts receivable was: 2
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