Question
Crane Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Year Pretax Income (Loss) Tax Rate 2018 $112,000 17
Crane Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes.
Year | Pretax Income (Loss) | Tax Rate | ||||
2018 | $112,000 | 17 | % | |||
2019 | 95,000 | 17 | % | |||
2020 | (284,000) | 19 | % | |||
2021 | 300,000 | 19 | % |
The tax rates listed were all enacted by the beginning of 2018.
(a)
Partially correct answer iconYour answer is partially correct.
Prepare the journal entries for the years 20182021 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryforward, assuming that at the end of 2020 the benefits of the loss carryforward are judged more likely than not to be realized in the future. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit | |
2018 | Income Tax Expense | 19040 | ||
Income Tax Payable | 19040 | |||
2019 |
| 16150 | ||
Income Tax Payable | 16150 | |||
2020 | Deferred Tax Expense | 53960 | ||
Income Tax Expense | 53960 | |||
2021 | Income Tax Expense | 57000 | ||
Income Tax Payable | 3040 | |||
Deferred Tax Expense | 53960 |
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