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 for2017–2020 are as follows:
service revenue collections pre tax accounting income
| 2017 | $ | 688,000 | | $ | 653,000 | | $ | 220,000 | |
| 2018 | | 780,000 | | | 795,000 | | | 285,000 | |
| 2019 | | 745,000 | | | 715,000 | | | 255,000 | |
| 2020 | | 730,000 | | | 760,000 | | | 235,000 | |
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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 showsthe balances in service revenue receivable at December 31,2017–2020.) Required: 1. Prepare the appropriate journalentry to record Alsup's 2018 income taxes, Alsup’s 2019 incometaxes and Alsup’s 2020 income taxes.
