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At the end of 2019 , its first year of operations, Swelland Company reported a pretax operating loss of $32,000 for both financial reporting and
At the end of 2019 , its first year of operations, Swelland Company reported a pretax operating loss of $32,000 for both financial reporting and income fax purposes. At that time, Swelland had no positive verifiable evidence that it would earn future taxable income. Howover, due to successful managament, the company reported pretax operating income (and taxable income) of $70,000 in 2020 . During both years, the income tax rate was 30\%, and no change had been enacted for future years. Required: 1. Prepare Sweiland's income tax joumal entries at the end of 2019. 2. Prepare Swelland's income tax journal entry at the end of 2020 . 3. Prepare the lower portion of Swelland's 2020 income statement. 1. Prepare Swelland's income tax journal entries on December 31, 2019. General Joumal instructions 3. Prepare the lower portion of Swelland's 2020 income statement
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