Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engagement, up to six months after services commence. Alsup recognizes service revenue for 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 for 2020–2023 are as follows:
Service Revenue Collections Pretax Accounting Income
2012 $718,000 $698,000 $270,000
2013 830,000 840,000 335,000
2014 795,000 775,000 305,000
2015 780,000 805,000 285,000
There are no differences between accounting income and taxable income other than the temporary difference described above. The enacted tax rate for each year is 40%.
(Hint: You may find it helpful to prepare a schedule that shows the balances in service revenue receivable at December 31, 2020–2023.)
Required:
1. Prepare the appropriate journal entry to record Alsup's 2021 income taxes. (If no entry is required for an event, select "No journal entry required" in the first account field.)
2. Prepare the appropriate journal entry to record Alsup's 2022 income taxes. (If no entry is required for an event, select "No journal entry required" in the first account field.)
3. Prepare the appropriate journal entry to record Alsup's 2023 income taxes. (If no entry is required for an event, select "No journal entry required" in the first account field.)
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