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.

Entries for 2020
Entries for 2021