Crane Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Pretax Income Year (Loss) Tax Rate 2023 $114,000 17% 2024 98,000 17% 2025 (204,000) 19% 2026 314,000 19% The tax rates listed were all enacted by the beginning of 2023. (a) Prepare the journal entries for the years 2023-2026 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryforward, assuming that at the end of 2025 the benefits of the loss carryforward are judged more likely than not to be realized in the future. (List all debit entries before credit entries. 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 O for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation 2023 Debit Credit

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.