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At the end of 2019 , Keil Company reports a pretax operating loss of $80,500 for both financial reporting and income tax purposes. Prior to
At the end of 2019 , Keil Company reports a pretax operating loss of $80,500 for both financial reporting and income tax purposes. Prior to 2019 , Keil had been successful and is expected to be successful in the future. The tax rate for 2019 and future years is 21%. Required: 1. Prepare Keil's income tax journal entry at the end of 2019. 2. Prepare the lower portion of Keil's 2019 income statement. Chart of Accounts ASSETS REVENUE 111 Cash 411 Sales Revenue 121 Accounts Receivable 141 Inventory EXPENSES 152 Prepaid Insurance 500 Cost of Goods Sold 160 Deferred Tax Asset 511 Insurance Expense 181 Equipment 512 Utilities Expense 198 Accumulated Depreciation 521 Salaries Expense 532 Bad Debt Expense LIABILITIES 540 Interest Expense 211 Accounts Payable 541 Depreciation Expense 231 Salaries Payable 559 Miscellaneous Expenses 250 Unearned Revenue 905 Income Tax Benefit from Operating Loss Carryforward 261 Income Taxes Payable 910 Income Tax Benefit from Operating Loss Carryback EQUITY 311 Common Stock 331 Retained Earnings 1. Prepare Keil's income tax journal entry on December 31, 2019. General Journal Instructions Income Statement 2. Prepare the lower portion of Keil's 2019 income statement. Income Statement Instructions
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