Question
Question # 4 (8 marks) Richmond Inc. reports the following incomes (losses) for both book and tax purposes. Year Accounting Income (loss) Tax rate 2016
Question # 4 (8 marks)
Richmond Inc. reports the following incomes (losses) for both book and tax purposes.
| Year | Accounting Income (loss) | Tax rate |
| 2016 | $25,000 | 30% |
| 2017 | 50,000 | 30% |
| 2018 | 70,000 | 35% |
| 2019 | 100,000 | 35% |
| 2020 | (310,000) | 40% |
| 2021 | 160,000 | 40% |
Instructions
Prepare the journal entries for 2020 and 2021 to record income taxes. Assume that at December 31, 2020 that it was judged more likely than not that the loss carry forward benefits would be realized. Richmond reports under IFRS and the carryback provision is used where possible.
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| Entries for 2021 |
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