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The accounting income (loss) and related tax rates during the years 2011 to 2017 follows: Year Accounting income (loss) Tax Rate 2011 $210,000 20% 2012

The accounting income (loss) and related tax rates during the years 2011 to 2017 follows:

Year

Accounting income (loss)

Tax Rate

2011

$210,000

20%

2012

75,000

20%

2013

180,000

20%

2014

240,000

30%

2015

(615,000)

35%

2016

210,000

30%

2017

270,000

25%

Accounting income (loss) and taxable income (loss) were the same for all years since the company began. The tax rates from 2014 to 2017 were enacted in 2014.

Required:

Prepare the journal entries to record income taxes for the years 2015 to 2017. Assume the company uses the carryback provision where possible and expects to realize the benefits of any loss carryforward in the year immediately following the loss.

Indicate the effect on the December 31, 2015 balance sheet if the company follows ASPE. How would it be different if the company follows IFRS?

Beginning with Loss before income tax show the bottom of the income statement for 2015.

Beginning with Loss before income tax show the bottom of the income statement for 2016.

Prepare the journal entries for the years 2015 to 2017 to record income taxes, assuming the company uses the carry back provision where possible but is uncertain if it will realize the benefits of any loss carry forward in the future. (Ignore valuation account method under ASPE).

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