In 2020 to 2022, respectively, Boshville Company earned taxable income of $400,000, $1,000,000, and $600,000 and paid income tax of $120,000, $220,000, and $180,000. It is now the end of 2023, and the company incurs a loss of $3,000,000 for tax purposes and earns an accounting loss before tax of $2,500,000. The difference between accounting and taxable income is due to capital cost allowance exceeding depreciation expense. The tax rate is currently 45%. Boshville anticipates using only 60% of the losses carried forward within the allowable carryforward period. Required Record the journal entries for income tax expense and income tax payable or receivable for 2023. Use a valuation account for the unrecognized portion of losses carried forward.

In 2020 to 2022, respectively, Boshville Company earned taxable income of $400,000, $1,000,000, and $600,000 and paid income tax of $120,000, $220,000, and $180,000. It is now the end of 2023, and the company incurs a loss of $3,000,000 for tax purposes and earns an accounting loss before tax of $2,500,000. The difference between accounting and taxable income is due to capital cost allowance exceeding depreciation expense. The tax rate is currently 45%. Boshville anticipates using only 60% of the losses carried forward within the allowable carryforward period. Required Record the journal entries for income tax expense and income tax payable or receivable for 2023. Use a valuation account for the unrecognized portion of losses carried forward.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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