Amanda Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes:

Year Accounting Income (Loss) Tax Rate

2018 $ 20,000 24%

2019 50,000 26%

2020 (150,000) 33%

2021 120,000 35%

The tax rates listed were all enacted by the beginning of 2018. Amanda reports under the ASPE future income taxes method and uses a valuation allowance to account for future tax assets.

Instructions

Assume that it is more likely than not that 20% of the carry forward benefits will not be realized. Prepare the journal entries for 2020 and 2021.

Based on your entries in part (a), providethe income tax section of the 2020 and 2021 income statements, beginning with the line "Income (loss) before income tax." Indicate how the future tax asset account will be reported on the December 31, 2020 and 2021 balance sheets

Repeat part (c) assuming Zhao Inc. follows IFRS