Case Development began operations in December 2016. When property is sold on an

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Case Development began operations in December 2016. When property is sold on an Installment basts, Case recognizes Installment Income for financial reporting purposes n the year of the sale. For tax purposes, Installment Income is reported by the Installment method. 2016 Installment Income was $600,000 and will be collected over the next three years. Scheduled collections and enacted tax rates for 2017-2019 are as follows 2017 $130,000 20% 2018 330,000 30 2019 140,000 30 Pretax accounting Income for 2016 was $780,000. which Includes Interest revenue of $30,000 from municipal bonds. The enacted tax rate for 2016 is 20%. Required 1. Assuming no differences between accounting Income and taxable Income other than those described above, prepare the approprlate Journal entry to record Case's 2016 Income taxes. (If no entry is required for a transaction/event, select No journal entry required" In the first account field. Enter your answers In thousands.) 3 Answer is complete but not entirely correct. Income tax expense 197.000 Deferred tax liability Income tax payable 167.000 ol 30.000 2 What is Case's 2016 net income? (Enter your answer in thousands.) 3 Answer is complete but not entirely correct. 5583,000 | 3. How shouid the deferred tax amount be clasified in a classified bsiance sheet? Enter your answers in thousands.) ) Answer is complete but not entirely correct. Deferred Taxes Classification Amo Current habites 015 2e occ

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Solution 3:

Case Development Computation of Taxable income and income tax for 2016 Particulars Amount Pretax financial Income $780,000.00 Less: Income on installment sales $600,000.00 Less: Interest income on muncipal bonds $30,000.00 Taxable Income $150,000.00 Income tax (20%) $30,000.00

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