financial 3

Fabiola Zhupa reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: Year Tax Rate 2018 2019 2020 2021 Accounting Income (Loss) $ 1,000,000 2,500,000 (7,500,000) 6,000,000 25.0% 30.0% 40.0% 50.0% The tax rates listed were all enacted by the beginning of 2018. Fabiola Zhupa follows IFRS. Required: 1. Assume that it is more likely than not that 25.0% of the carry forward benefits will not be realized. Prepare the compound journal entries for 2020 and 2021. Date Account Debit Credit 2. Prepare the income tax section of the 2020 and 2021 income statements, beginning with the line "Income (loss) before income tax