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Only the last part please and show work Sheffield Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Year
Only the last part please and show work
Sheffield Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Year Tax Rate 2018 17 % Pretax Income (Loss) $116,000 110,000 (234,000) 317,000 2019 17 % 2020 19 % 2021 19 % The tax rates listed were all enacted by the beginning of 2018. Your answer is correct. Prepare the journal entries for the years 2018-2021 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryforward, assuming that at the end of 2020 the benefits of the loss carryforward are judged more likely than not to be realized in the future. (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 O for the amounts.) Date Account Titles and Explanation Debit Credit 2018 Income Tax Expense 19720 Income Tax Payable 19720 2019 Income Tax Expense 18700 Income Tax Payable 18700 2020 Deferred Tax Asset 44460 Income Tax Expense 44460 2021 Income Tax Expense 60230 Income Tax Payable 15770 Deferred Tax Asset 44460 Assuming that at the end of 2020 the benefits of the loss carryforward are judged more likely than not to be realized in the future, 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).) Sheffield Inc. Income Statement (Partial) For the Year Ended December 31, 2020 Operating Loss before Income Taxes $ (234000) Income Tax Benefit Deferred 44460 i Net Income / (Loss) $ > (189540) Prepare the journal entries for 2020 and 2021, assuming that based on the weight of available evidence, it is more likely than not that one-fourth 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 O for the amounts.) Date Account Titles and Explanation Debit Credit 2020 (To record refund.) (To record allowance.) 2021 (To record income taxes.) (To adjust allowance.)Step by Step Solution
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