Ayayai Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: Accounting Income Year (Loss) Tax Rate 2018 $121,000 25 % 2019 91,000 25 % 2020 (283,000) 30 % 2021 211,000 30 % The tax rates listed were all enacted by the beginning of 2018. Ayayai reports under the ASPE future/deferred income taxes method. Prepare the journal entries for each of the years 2018 to 2021 to record income tax. Assume the tax loss is first carried back, and that at the end of 2020, the loss carryforward benefits are judged more likely than not to be realized in the future. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.) Date Account Titles and Explanation Debit Credit 2018 2019 2020 (To record benefit from loss carryback) (To record deferred benefit from loss carryforward) 2021 (To record current tax expense) (To record deferred tax expense) e Textbook and Media List of Accounts Assuming the tax loss is first carried back and that at the end of 2020, the loss carryforward benefits are judged more likely than not to be realized in the future, prepare the income tax section of the 2020 and 2021 income statements, beginning with the line "Income (loss) before income tax. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Ayayai Inc. (Partial) Income Statement $ $ $ Ayayai Inc. (Partial) Income Statement $ $ e Textbook and Media List of Accounts Prepare the journal entries for 2020 and 2021. Assume that it is more likely than not that one quarter of the carryforward benefits will not be realized. This company does not use a valuation allowance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.) Date Account Titles and Explanation Debit Credit 2020 (To record benefit from loss carryback.) (To record future benefit from loss carryforward.) 2021 (To record current tax expense.) (To record deferred tax expense.) e Textbook and Media List of Accounts Assume that it is more likely than not that one quarter of the carryforward benefits will not be realized. This company does not use a valuation allowance. Prepare the income tax section of the 2020 and 2021 income statements, beginning with the line "Income (loss) before income tax. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45).) Ayayai Inc. (Partial) Income Statement $ $ $ Ayayai Inc. (Partial) Income Statement $ $ e Textbook and Media List of Accounts
