Exercise 19-24

Nash Inc. reports the following pretax income (loss) for both book and tax purposes.

Year		Pretax Income (Loss)			Tax Rate
2018		$130,000			20	%
2019		94,000			20	%
2020		(307,000	)		25	%
2021		112,000			25	%

The tax rates listed were all enacted by the beginning of 2018.

Prepare the journal entries for years 20182021 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized. (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
2019
2020
	(To record income taxes.)
	(To record allowance.)
2021
	(To record income taxes.)
	(To adjust allowance.)

Prepare the income tax section of the 2020 income statement beginning with the line Operating loss before income taxes. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Nash Inc. Income Statement (Partial) December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020
DividendsExpensesBenefit Due to Loss CarrybackBenefit Due to Loss CarryforwardIncome Tax BenefitIncome Tax Expense - CurrentIncome Tax Expense - DeferredNet Income / (Loss)Operating Loss before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		$
DividendsExpensesBenefit Due to Loss CarrybackBenefit Due to Loss CarryforwardIncome Tax BenefitIncome Tax Expense - CurrentIncome Tax Expense - DeferredNet Income / (Loss)Operating Loss before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues
DividendsExpensesBenefit Due to Loss CarrybackBenefit Due to Loss CarryforwardIncome Tax BenefitIncome Tax Expense - CurrentIncome Tax Expense - DeferredNet Income / (Loss)Operating Loss before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues
DividendsExpensesBenefit Due to Loss CarrybackBenefit Due to Loss CarryforwardIncome Tax BenefitIncome Tax Expense - CurrentIncome Tax Expense - DeferredNet Income / (Loss)Operating Loss before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		$

Prepare the income tax section of the 2021 income statement beginning with the line Income before income taxes. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Nash Inc. Income Statement (Partial) December 31, 2021For the Year Ended December 31, 2021For the Quarter Ended December 31, 2021
CurrentDeferredDividendsExpensesIncome Tax Benefit Due to Loss CarrybackIncome Tax Benefit Due to Loss CarryforwardIncome Tax ExpenseNet Income / (Loss)Income before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		$
CurrentDeferredDividendsExpensesIncome Tax Benefit Due to Loss CarrybackIncome Tax Benefit Due to Loss CarryforwardIncome Tax ExpenseNet Income / (Loss)Income before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues
CurrentDeferredDividendsExpensesIncome Tax Benefit Due to Loss CarrybackIncome Tax Benefit Due to Loss CarryforwardIncome Tax ExpenseNet Income / (Loss)Income before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues
CurrentDeferredDividendsExpensesIncome Tax Benefit Due to Loss CarrybackIncome Tax Benefit Due to Loss CarryforwardIncome Tax ExpenseNet Income / (Loss)Income before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		$

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