Question
Brockwood Incorporated reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: $126,000 in 2015; $94,000 in 2016; $(297,000) in 2017;
Brockwood Incorporated reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: $126,000 in 2015; $94,000 in 2016; $(297,000) in 2017; and $217,000 in 2018. The tax rates were 25% for 15 and 16 and in 2017 and 2018 the rate was 30%. The tax rates were all enacted by the beginning of 2015. Brockwood reports under the ASPE future/deferred income taxes method. Assume Brockwood uses a valuation allowance to account for deferred tax assets and assume that it is likely that 25% of the carryforward benefits will not be realized. Prepare the 2017 and 218 journal entries.
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