Answer the following question: Jason Ltd had the following pre-tax net earnings (loss): Year Taxable Income Tax Rate 20X3 (120000) 25% 20X4 720000 30% 20X5 880000 30% 20X6 (2600000) 30% 20X7 280000 35% 20X8 1000000 35% There have been no temporary differences between pre-tax accounting income and taxable income. In all years, the probability of loss carryforward use was low. For each year, prepare journal entries to record income tax expense (recovery). The entry in 20X7 is: Dr I/T Expense Cr I/T Payable $98000, Dr I/T Payable Cr I/T Expense $98000 Why is there two entries for $98000? Show how number was got as well.
Answer the following question: Jason Ltd had the following pre-tax net earnings (loss): Year Taxable Income Tax Rate 20X3 (120000) 25% 20X4 720000 30% 20X5 880000 30% 20X6 (2600000) 30% 20X7 280000 35% 20X8 1000000 35% There have been no temporary differences between pre-tax accounting income and taxable income. In all years, the probability of loss carryforward use was low. For each year, prepare journal entries to record income tax expense (recovery). The entry in 20X7 is: Dr I/T Expense Cr I/T Payable $98000, Dr I/T Payable Cr I/T Expense $98000 Why is there two entries for $98000? Show how number was got as well.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Answer the following question:
Jason Ltd had the following pre-tax net earnings (loss):
Year Taxable Income Tax Rate
20X3 (120000) 25%
20X4 720000 30%
20X5 880000 30%
20X6 (2600000) 30%
20X7 280000 35%
20X8 1000000 35%
There have been no temporary differences between pre-tax accounting income and taxable income. In all years, the probability of loss carryforward use was low. For each year, prepare journal entries to record income tax expense (recovery).
The entry in 20X7 is: Dr I/T Expense Cr I/T Payable $98000, Dr I/T Payable Cr I/T Expense $98000
Why is there two entries for $98000? Show how number was got as well.
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