Business, 13.03.2020 01:52 Geo777

Change in tax rate; record taxes for four years [LO16-1, 16-4, 16-5]

The DeVille Company reported pretax accounting income on its income statement as follows:

2018 $ 405,000
2019 325,000
2020 395,000
2021 435,000

Included in the income of 2018 was an installment sale of property in the amount of $52,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $20,800 in 2019, $26,000 in 2020, and $5,200 in 2021.

Included in the 2020 income was $21,000 interest from investments in municipal bonds.

The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond.

Required:
Prepare the year-end journal entries to record income taxes for the years 2018–2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Change in tax rate; record taxes for four years [LO16-1, 16-4, 16-5]

The DeVille Company...

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