Zhao Inc. reports the following pre$-$tax incomes $($losses$)$ for both financial reporting purposes and tax purposes:

Year Accounting Income $($Loss$)$ Tax Rate

$2021$ $ $20,00025\%$

$202250,00028\%$

$2023(150,000)30\%$

$2024120,00030\%$

The tax rates listed were all enacted by the beginning of $2021.$ Zhao reports under the $**$ASPE$**$ future income taxes method and uses a valuation allowance to account for future tax assets.

Instructions

a$)$ Assume that at the end of $2023$ it is more likely than not that $20\%$ of the carry forward benefits will not be realized. Prepare the journal entries for $2023$ and $2024.$

b$)$ Based on your entries in part $($a$),$ prepare the income tax section of the $2023$ and $2024$ income statements, beginning with the line $$Operating income $($loss$)$ before income tax.$$

c$)$ Indicate how the future tax asset account will be reported on the December $31,2023$ and $2024$ balance sheets.

d$)$ Repeat part $($c$)$ assuming Zhao Inc. follows IFRS.