Question
In 2016 to 2018 respectively, Bonwick Co. earned taxable income of $500,000, $800,000 and $700,000, and paid income tax of $150,000, $260,000, and $200,000. It
In 2016 to 2018 respectively, Bonwick Co. earned taxable income of $500,000, $800,000 and $700,000, and paid income tax of $150,000, $260,000, and $200,000. It is now the end of 2019 and the company has incurred a loss of $3,500,000 for tax purposes and earns an accounting loss before tax of $3,000,000. The difference between accounting and taxable income is due to CCA exceeding depreciation expense. The tax rate is currently 30%. Bonwick anticipates using only 60% of the losses carried forward within the allowable carryforward period.
Required:
Record the journal entries for income tax expense and income tax payable or receivable for 2019.
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