Nielson AG reports the following pretax income (loss) for both book and tax purposes. (Assume the carryback
Question:
Nielson AG reports the following pretax income (loss) for both book and tax purposes. (Assume the carryback provision is used where possible for a net operating loss.)
The tax rates listed were all enacted by the beginning of 2017.
Instructions
a. Prepare the journal entries for years 2017-2020 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryback and loss carryforward, assuming that based on the weight of available evidence it is probable that one-half of the benefits of the loss carryforward will not be realized.
b. Prepare the income tax section of the 2019 income statement, beginning with the line "Operating loss before income taxes."
c. Prepare the income tax section of the 2020 income statement, beginning with the line "Income before income taxes."
Step by Step Answer:
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield