Problem $1$

Kendall Corp., a domestic, calendar$-$year C$-$corporation, prepared the following $($in mid$-$December$)$ as part of its income tax footnote for the current year. The rate is $21\%$ and no future rate changes have been enacted.

Please complete the following:

$1.$ What entry did Kendall make to record the change in deferred tax assets and liabilities this year?

$2.$ Assume management this year believes it is more likely than not that only $\frac{1}{2}$ of the capital loss will be usable before expiration. What additional journal entry must Kendall make? What is the total amount of the capital loss carryforward?

$3.$ Assume pre$-$tax financial income is $$2,900,000$ and that Kendall is entitled to a $$14,500$ nonrefundable tax credit. Please prepare the income tax provision and construct the effective tax rate reconciliation $($in $ and $\%).$ Please show every reconciling item in the rate reconciliation regardless of significance.

Problem $2$

Please assume the same facts as Problem $1,$ but also assume that Congress enacted a tax rate change in late December that reduced the corporate tax rate to $17\%$ effective next year.

What additional entry$/$entries must Kendall make this year?

Please revise the DTA$/$DTL schedule given this new rate$-$enactment assumption.

Please rework numbers $1-3$ in Problem $1$ with this new rate$-$enactment assumption.