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How do i calculate Deferred tax asset ? Please show work DigiCom was founded at the beginning of 2013. For the first seven years, the
How do i calculate Deferred tax asset ? Please show work
DigiCom was founded at the beginning of 2013. For the first seven years, the company had the taxable income and losses shown below, prior to considering any tax loss carryforwards or carrybacks. The tax rates for 2013 through 2019 were all enacted in 2013 Year 2013 2014 2015 2016 2017 2018 2019 Taxable income (Loss) $155,000 $170,000 ($410,000) $96,000 ($344,000) $235,000 $335,000 Tax Rate 40% 30% 33% 38% 43% 46% 31% Assume: The tax rate for 2020 and 2021 is 31%. DigiCom had no permanent or temporary differences in any of the years. You are aware in 2017 of the amount of tax payable that will be recorded in 2018. In 2017, you will adjust the Loss carryforward benefit to reflect the tax rates in effect in 2018 and 2019. Prepare the entries to record income tax expense for each year, 2015 through 2019. The company believes it is probable that sufficient future taxable profit will be generated to utilize the losses. Use December 31 for each entry. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). Please make sure your final answer(s) are accurate to 2 decimal placesStep by Step Solution
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