SUPPLEMENTAL PROBLEM 19-2

Meyer reported the following pretax financial income (loss) for the years 2019-2022:

2019	$350,000
2020	120,000
2021	(570,000)
2022	180,000

Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate is 21% for all years.

REQUIRED:

1. Prepare journal entries for 2021 and 2022 to record the current portion and the deferred portion of income taxes, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carryforward will not be realized.
2. Prepare the income tax section of the 2021 income statement beginning with the line Income (loss before income taxes.