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Swifty Inc. reported the following accounting income (loss) and related tax rates during the years 2015 to 2021: Accounting Tax Year Income (Loss) Rate 2015
Swifty Inc. reported the following accounting income (loss) and related tax rates during the years 2015 to 2021:
Accounting | Tax | ||||||
---|---|---|---|---|---|---|---|
Year | Income (Loss) | Rate | |||||
2015 | $70,000 | 25% | |||||
2016 | 22,000 | 25% | |||||
2017 | 60,000 | 25% | |||||
2018 | 80,000 | 30% | |||||
2019 | (203,000 | ) | 35% | ||||
2020 | 71,000 | 30% | |||||
2021 | 91,000 | 25% |
Accounting income (loss) and taxable income (loss) were the same for all years since Swifty began business. The tax rates from 2018 to 2021 were enacted in 2018. Assume Swifty Inc. follows ASPE for all parts of this question, except when asked about the effect of reporting under IFRS in part (b).
Prepare the journal entries to record income taxes for the years 2019 to 2021. Assume that Swifty uses the carryback provision where possible and expects to realize the benefits of any loss carryforward in the year account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Year Account Titles and Explanation Debit Credit 2019 Income Tax Receivable-2016 Income Tax Receivable-2017 Current Tax Expense Allowance to Reduce Future Tax Asset to Expected Realizable Value Future Tax Expense Income Tax Receivable-2018 Income Tax Payable 2019 Current Tax Benefit Future Tax Benefit Future Tax Asset No Entry from loss carryforward) 2020 (To record current tax expense) 2020 (To record future tax expense) 2021 (To record income taxes) Show how the bottom portion of the income statement would be reported in 2019, beginning with "Loss before income tax. Swifty Inc. (Partial) Income Statement 2019 Future Tax Asset Current Income Tax Benefit due to Loss Carryback Net Income / (Loss) Future Income Tax Benefit due to Loss Carryforward Future Tax Liability Income Tax Expense-Current Income Tax Expense-Future Income / (Loss) Before Income Tax LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Show how the bottom portion of the income statement would be reported in 2020, starting with "Income before income tax. Swifty Inc. (Partial) Income Statement 2020 $ $Step by Step Solution
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