Cross Company reported the following results for the year ended 31 December 2020 and 2021, its first two years of operat

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Cross Company Reported The Following Results For The Year Ended 31 December 2020 And 2021 Its First Two Years Of Operat 1 (68.19 KiB) Viewed 51 times

Cross Company reported the following results for the year ended 31 December 2020 and 2021, its first two years of operations: Pre-tax financial income 2020 $750,000 2021 $ 600,000 In 2020, Cross Company made $100,000 sales on account and received the cash payment in 2021. Cash collected from customers are taxable in the period when they are received. There is no other temporary or permanent difference from 2020 to 2021. The enacted tax rate is 20%. Required: (Support with detailed calculations.) a. b. What is Cross Company's taxable income in 2020 and 2021, respectively? (4 marks) Discuss whether the sales on account create a deferred tax asset, a deferred tax liability, or neither for 2020. (5 marks) Prepare the journal entries for income tax in 2020. (6 marks) c.