Gustav,Inc.uses the accrual basis to account for all sales transactions.Sales for 2015 total $500,000.Included in this amount is $75,000 in receivables from sales on installment.Installment sales are considered revenue for book purposes,but not for tax purposes.Operating expenses total $150,000 and are treated the same for book and tax purposes.
Complete the following:
a.What is the book basis of the installment sales receivable?
b.What is the tax basis of the installment sales receivable?
c.Assuming a 30% tax rate,compute income tax expense,the deferred tax provision,and income tax payable for 2015.
d.Prepare the journal entry to record the 2015 income tax expense.

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The Answer of Gustav,Inc.uses the accrual basis to account for all sales transactions.Sales for 2015 total $500,000.Included in this amount is $75,000 in receivables from sales on installment.Installment sales are considered revenue for book purposes,but not for tax purposes.Operating expenses total $150,000 and are treated the same for book and tax purposes.
Complete the following:
a.What is the book basis of the installment sales receivable?
b.What is the tax basis of the installment sales receivable?
c.Assuming a 30% tax rate,compute income tax expense,the deferred tax provision,and income tax payable for 2015.
d.Prepare the journal entry to record the 2015 income tax expense.