Question
DAAME Associates reported the following income information for the 2019-2021 period: Year Reported Income (Loss) 2019 ($1,200,000) 2020 $500,000 2021 $580,000 The company does not
DAAME Associates reported the following income information for the 2019-2021 period:
Year
Reported Income (Loss)
2019 ($1,200,000)
2020 $500,000
2021 $580,000
The company does not have any book-tax differences and is subject to a 21% income tax rate. DAAME is filing a US Corporate Income Tax Return.
Required for Part A:
a.Prepare the journal entry to record the 2019 income tax provision.
b.Prepare the journal entry to record the 2020 income tax provision.
c.Prepare the journal entry to record the 2021 income tax provision.
d.Determine the balance of the deferred tax asset at the end of 2021.
e.Assume that a newly enacted tax law increases the income tax rate to 25% on January 2,2022. Prepare the journal entry to record the effects of the tax rate change.
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