Tru Developers, Incorporated, sells plots of land for industrial development. Tru recognizes income for financial reporting purposes in to $3.$ What portion of the tax benefit of tax$-$free interest will Tru recognize on its $2024$ tax return and financial statements?

What portion of the tax on the $$60$ million income from the plots sold on an installment basis will Tru defer on its $2024$ tax

return and deferred tax asset or liability in its $2024$ financial statements?

Note: Enter your answers in millions $($i$.$e$.,10,000,000$ should be entered as $10).$ Prepare the journal entry to record income taxes in $2024,$ assuming full recognition of the tax benefits in the financial statements of both

differences between pretax accounting income and taxable income.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in

millions $($i$.$e$.,10,000,000$ should be entered as $10).$

Journal entry worksheet

Record $2024$ income taxes.

Note: Enter debits before credits. Prepare the journal entry to record income taxes in $2024,$ assuming the recognition of the tax benefits in the financial statements you

indicated in requirements $1-3.$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in

millions $($i$.$e$.,10,000,000$ should be entered as $10).$

Journal entry worksheet

$1$

Record $2024$ income taxes.

Note: Enter debits before credits.

the year it sells the plots. For some of the plots sold this year, Tru took the position that it could recognize the income for tax purposes

when the installments are collected. Income that Tru recognized for financial reporting purposes in $2024$ for plots in this category was

$$60$ million. The company expected to collect $60\%$ of each sale in $2025$ and $40\%$ in $2026.$ This amount over the next two years is as

follows:

Tru's pretax accounting income for $2024$ was $$100$ million. In its income statement, Tru reported interest income of $$20$ million,

unrelated to the land sales, for which the company's position is that the interest is not taxable. Accordingly, the interest was not

reported on the tax return. There are no differences between accounting income and taxable income other than those described

above. The enacted tax rate is $40$ percent.

Management believes the tax position taken on the land sales has a greater than $50\%$ chance of being upheld based on its technical

merits, but the position taken on the interest has a less than $50\%$ chance of being upheld. It is further believed that the following

likelihood percentages apply to the tax treatment of the land sales $($ $ in millions$)$:

Required:

What portion of the tax benefit of tax$-$free interest will Tru recognize on its $2024$ tax return?

What portion of the tax benefit of tax$-$free interest will Tru recognize on its $2024$ financial statements?

$3-$a$.$ What portion of the tax on the $$60$ million income from the plots sold on an installment basis will Tru defer on its $2024$ tax return?

$3-$b$.$ What portion of the tax on the $$60$ million income from the plots sold on an installment basis will Tru show as a deferred tax asset

or liability in its $2024$ financial statements?

Prepare the journal entry to record income taxes in $2024,$ assuming full recognition of the tax benefits in the financial statements of

both differences between pretax accounting income and taxable income.

Prepare the journal entry to record income taxes in $2024,$ assuming the recognition of the tax benefits in the financial statements

you indicated in requirements $1-3.$

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