Mulholland Corp. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes:

Year	Accounting Income (Loss)	Tax Rate
2018	$ 20,000	24%
2019	50,000	26%
2020	(150,000)	33%
2021	120,000	35%

The tax rates listed were all enacted by the beginning of 2018. Mulholland reports under the ASPE future income taxes method and uses a valuation allowance to account for future tax assets.

Instructions

1. Assume that it is more likely than not that 20% of the carry forward benefits will not be realized. Prepare the journal entries for 2020 and 2021.
2. Based on your entries in part (a), prepare the income tax section of the 2020 and 2021 income statements, beginning with the line Income (loss) before income tax.
3. Indicate how the future tax asset account will be reported on the December 31, 2020 and 2021 balance sheets.
4. Repeat part (c) assuming Mulholland follows IFRS.