Question
Skysong Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Prepare the journal entries for 2020 and 2021, assuming
Skysong Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes.
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 0 for the amounts.)
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, 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).)
Year Tax Rate 17 % 2018 2019 Pretax Income (Loss) $123,000 113,000 (212,000) 303,000 17 % 19 % 2020 2021 19 % The tax rates listed were all enacted by the beginning of 2018. Debit Credit Date Account Titles and Explanation 2020 (To record refund.) (To record allowance.) Income Tax Expense 2021 Income Tax Payable Deferred Tax Asset (To record income taxes.) (To adjust allowance.) Skysong Inc. Income Statement (Partial) $ $ (
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