In its first three years of operations, Vaden Corp. experienced the following income/(losses): Year Income/(Loss) Tax Rate 2020 50,000 0.35 2021 40,000 0.30 2022 (130,000) 0.30 Required: Prepare the journal entry that Vaden needs to make in 2022, assuming that it is more likely than not that any loss carryforward will be realized? Prepare the income tax section of the income statement for 2022, beginning with Pretax Net Loss. What additional entry would Vaden need to make in 2022 if it is more likely than not that any loss carryforward will NOT be realized?
In its first three years of operations, Vaden Corp. experienced the following income/(losses): Year Income/(Loss) Tax Rate 2020 50,000 0.35 2021 40,000 0.30 2022 (130,000) 0.30 Required: Prepare the journal entry that Vaden needs to make in 2022, assuming that it is more likely than not that any loss carryforward will be realized? Prepare the income tax section of the income statement for 2022, beginning with Pretax Net Loss. What additional entry would Vaden need to make in 2022 if it is more likely than not that any loss carryforward will NOT be realized?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
- In its first three years of operations, Vaden Corp. experienced the following income/(losses):
|
Year |
Income/(Loss) |
Tax Rate |
|
2020 |
50,000 |
0.35 |
|
2021 |
40,000 |
0.30 |
|
2022 |
(130,000) |
0.30 |
Required:
- Prepare the
journal entry that Vaden needs to make in 2022, assuming that it is more likely than not that any loss carryforward will be realized? - Prepare the income tax section of the income statement for 2022, beginning with Pretax Net Loss.
- What additional entry would Vaden need to make in 2022 if it is more likely than not that any loss carryforward will NOT be realized?
I need only answer 3
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