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Problem 5 [NOL] ABC reported a pretax GAAP loss of ($200,000) for the year ended December 31, 2020. ABC's tax accounting methods and GAAP accounting methods are the same and there are no permanent differences in 2020. The corporate tax rate is 21% in 2020 and future years. Required 1. Prepare the entries needed to record current and deferred income taxes at December 31, 2020. Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Account Debit Credit 1 1 1 1 1 1 Enter your answer to the following question in the green box What amount of net income will be reported on the 2020 income statement? NOTE: enter a loss as a negative value 4 2. Assume that ABC returned to profitability in 2021, reporting pretax GAAP income of $100,000 for the year ended December 31, 2021. ABC's tax accounting methods and GAAP accounting methods are the same in 2021 and there are no permanent differences in 2021. Prepare the entries needed to record current and deferred income taxes at December 31, 2021. Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Account Debit Credit 2 2 2 2 2 2 Enter your answer to the following question in the green box What amount of net income will be reported on the 2021 income statement? 5 3. Repeat #2 assuming that ABC's pretax income for the year ended December 31, 2021 was $500,000. Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Account Debit Credit 3 3 3 3 3 3 Enter your answer to the following question in the green box What amount of net income will be reported on the 2021 income statement? 6 Deferred income tax asset (Bal. Sht) Deferred income tax asset valuation allowance (Bal. Sht) Deferred income tax liability (Bal.Sht) Income tax payable (Bal.Sht) Liability for uncertain tax position (Bal. Sht) Income tax expense (Inc. Stmt) Problem 5 [NOL] ABC reported a pretax GAAP loss of ($200,000) for the year ended December 31, 2020. ABC's tax accounting methods and GAAP accounting methods are the same and there are no permanent differences in 2020. The corporate tax rate is 21% in 2020 and future years. Required 1. Prepare the entries needed to record current and deferred income taxes at December 31, 2020. Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Account Debit Credit 1 1 1 1 1 1 Enter your answer to the following question in the green box What amount of net income will be reported on the 2020 income statement? NOTE: enter a loss as a negative value 4 2. Assume that ABC returned to profitability in 2021, reporting pretax GAAP income of $100,000 for the year ended December 31, 2021. ABC's tax accounting methods and GAAP accounting methods are the same in 2021 and there are no permanent differences in 2021. Prepare the entries needed to record current and deferred income taxes at December 31, 2021. Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Account Debit Credit 2 2 2 2 2 2 Enter your answer to the following question in the green box What amount of net income will be reported on the 2021 income statement? 5 3. Repeat #2 assuming that ABC's pretax income for the year ended December 31, 2021 was $500,000. Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Account Debit Credit 3 3 3 3 3 3 Enter your answer to the following question in the green box What amount of net income will be reported on the 2021 income statement? 6 Deferred income tax asset (Bal. Sht) Deferred income tax asset valuation allowance (Bal. Sht) Deferred income tax liability (Bal.Sht) Income tax payable (Bal.Sht) Liability for uncertain tax position (Bal. Sht) Income tax expense (Inc. Stmt)
