Question
Ayayai Inc. reports the following incomes (losses) for both book and tax purposes (assume the carryback provision is used where possible): Accounting Income Year (Loss)
Ayayai Inc. reports the following incomes (losses) for both book and tax purposes (assume the carryback provision is used where possible):
Accounting | ||||||
Income | ||||||
Year | (Loss) | Tax Rate | ||||
2014 | $140,000 | 25 | % | |||
2015 | 111,000 | 25 | % | |||
2016 | (321,000 | ) | 30 | % | ||
2017 | 52,000 | 30 | % |
The tax rates listed were all enacted by the beginning of 2014.
A) Prepare the journal entries for each of the years 2014 to 2017 to record income taxes, assuming at December 31, 2016, that it was more likely than not that the company would not be able to benefit from the remaining losses available to carryforward
B) Prepare the income tax section of the income statements for each of the years 2014 to 2017, beginning with the line Income (loss) before income tax.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started