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: Pretax Accounting
Service Revenue Collections Income
2020 $728,000 $688,000 $254,000
2021 818,000 846,000 328,000
2022 778,000 770,000 296,000
2023 784,000 788,000 268,000
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, 2017-2020.)
Required:
Prepare the appropriate journal entry to record Alsup's 2018 income taxes, Alsup's 2019 income taxes and Alsup's 2020 income taxes.