Silver began operations in 2014. The company sometimes sells used warehouses on an

| April 14, 2018

ProblemSilver began operations in 2014. The company sometimes sells used warehouses on aninstallment basis. In those cases, Silver reports income in its income statement in the year of thesale. In its income tax return, though, Silver reports installment income by the installmentmethod. Installment income in 2014 was $90,000, which Silver expects to collect equally overthe next three years. The tax rate is 30%, but based on an enacted law, is scheduled to become35% in 2016.Silver’s pretax accounting income from the 2014 income statement was $830,000, whichincludes $40,000 of interest revenue from an investment in municipal bonds. There were nodifferences between accounting income and taxable income other than those described above.Required:(1) Prepare the appropriate journal entry to record Silver’s 2014 income taxes. Show calculations.(2) What is Silver’s 2014 net income?

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