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The operating loss and net income are incorrect Wildhorse Inc. reported the following pretax income (loss) and related tax rates during the years 2019-2022. Tax
The operating loss and net income are incorrect
Wildhorse Inc. reported the following pretax income (loss) and related tax rates during the years 2019-2022. Tax Rate 2019 40 % 2020 Pretax Income (loss) $36,500 (198,000) 248,000 80,900 40 % 2021 20 % 2022 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Wildhorse began business. The tax rates from 2019-2022 were enacted in 2019. Your answer is correct. Prepare the journal entries for the years 2020-2022 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryforward. Assume that Wildhorse expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year. (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 Ofor the amounts.) Date Account Titles and Explanation Debit Credit 2020 Deferred Tax Asset 39600 Income Tax Expense 39600 2021 Income Tax Expense 49600 Income Tax Payable 10000 Deferred Tax Asset 39600 2022 Income Tax Expense 16180 Income Tax Payable 16180 Prepare the portion of the income statement, starting with Operating loss before income taxes, for 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Wildhorse Inc. Income Statement (Partial) For the Year Ended December 31, 2020 Operating Loss before Income Taxes 198000 Income Tax Benefit Income Tax Expense - Loss Carryforward 39600 i Net Income /(Loss) $ 158400Step by Step Solution
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