Case Development began operations in December 2018. When property is sold on an installment basis,...
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Case Development began operations in December 2018. When property is sold on an installment basis, Case recognizes installment income for financial reporting purposes in the year of the sale. For tax purposes, installment income is reported by the installment method. 2018 installment income was $880,000 and will be collected over the next three years. Scheduled collections and enacted tax rates for 20192021 are as follows:
2019
$
200,000
30
%
2020
470,000
40
2021
210,000
40
Pretax accounting income for 2018 was $1,194,000, which includes interest revenue of $44,000 from municipal bonds. The enacted tax rate for 2018 is 30%. Required:1. Assuming no differences between accounting income and taxable income other than those described above, prepare the appropriate journal entry to record Cases 2018 income taxes. 2. What is Cases 2018 net income?
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