Assume that Sejo Skis Ltd. incurred a ($600,000) loss in fiscal 2020 due to losing a very large lawsuit, which was a one-time extraordinary event. Sejo Skis Ltd. had taxable income of $4,000,000 in fiscal 2016 when the tax rate was 15%. The company broke even in the tax years 2017, 2018 and 2019. Tax rates are expected to increase in the future to 16%. The company is still very short of cash from losing the lawsuit. Required: Prepare the required entries based on the above information.

In its first year of operations, 2019, Bose Ltd. reports taxable income of $75,000 and paid 13% in income taxes. It is now the end of 2020, and Bose Ltd. has a loss of ($200,000) for tax purposes due to a global pandemic. Boses management believes at the end of 2020, that it is likely the company will be able to use up its tax losses as sales are now increasing rapidly. The tax rate is currently 13% but rates are expected to increase to 15% starting in 2021. The company is not short of cash but does wish to maximize profit in all its tax years. Required: Prepare the required entries based on the above information.