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 $780,000 and will be collected over the next three years. Scheduled collections and enacted tax rates for 2019–2021 are as follows: $186,000 30% 340, 000 254, 000 2019 2020 40 2021 40 Case also had product warranty costs of $98,000 expensed for financial reporting purposes in 2018. For tax purposes, only the $29,000 of warranty costs actually paid in 2018 was deducted. The remaining $69,000 will be deducted for tax purposes when paid over the next three years as follows: 2019 $23,600 30% 2020 28,600 40 16,800 40 2021 Pretax accounting income for 2018 was $1,080,000, which includes interest revenue of $28,000 from municipal bonds. The enacted tax rate for 2018 is 30%

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 $780,000 and will be collected over the next three years. Scheduled collections and enacted tax rates for 2019–2021 are as follows: $186,000 30% 340, 000 254, 000 2019 2020 40 2021 40 Case also had product warranty costs of $98,000 expensed for financial reporting purposes in 2018. For tax purposes, only the $29,000 of warranty costs actually paid in 2018 was deducted. The remaining $69,000 will be deducted for tax purposes when paid over the next three years as follows: 2019 $23,600 30% 2020 28,600 40 16,800 40 2021 Pretax accounting income for 2018 was $1,080,000, which includes interest revenue of $28,000 from municipal bonds. The enacted tax rate for 2018 is 30%

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 28E: On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First...

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