Date Account Titles and Explanation Debit Credit 2020 (To record refund.) (To record allowance.) 2021 (To record income taxes.) (To adjust allowance.)
Date Account Titles and Explanation Debit Credit 2020 (To record refund.) (To record allowance.) 2021 (To record income taxes.) (To adjust allowance.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 19-23
Spamela Hamderson Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes.
The tax rates listed were all enacted by the beginning of 2018.
|
Year
|
Pretax Income
(Loss) |
Tax Rate
|
||||
| 2018 | $120,000 | 17 | % | |||
| 2019 | 90,000 | 17 | % | |||
| 2020 | (280,000) | 19 | % | |||
| 2021 | 300,000 | 19 | % |
The tax rates listed were all enacted by the beginning of 2018.
Prepare the journal entries for 2020 and 2021, assuming that based on the weight of available evidence, it is more likely than not that one-fourth of the benefits of the loss carryforward will not be realized. (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 0 for the amounts.)
Transcribed Image Text:Date Account Titles and Explanation
Debit
Credit
2020
(To record refund.)
(To record allowance.)
2021
(To record income taxes.)
(To adjust allowance.)
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