Meyer reported the following pretax financial income (loss) for the years 2019-2022: 2019 $350,000 2020 120,000 2021 (570,000) 2022 180,000 Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate is 21% for all years. REQUIRED: Prepare journal entries for 2021 and 2022 to record the current portion and the deferred portion of income taxes, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carryforward will not be realized. Prepare the income tax section of the 2021 income statement beginning with the line “Income (loss before income taxes.”
Meyer reported the following pretax financial income (loss) for the years 2019-2022: 2019 $350,000 2020 120,000 2021 (570,000) 2022 180,000 Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate is 21% for all years. REQUIRED: Prepare journal entries for 2021 and 2022 to record the current portion and the deferred portion of income taxes, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carryforward will not be realized. Prepare the income tax section of the 2021 income statement beginning with the line “Income (loss before income taxes.”
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
SUPPLEMENTAL PROBLEM 19-2
Meyer reported the following pretax financial income (loss) for the years 2019-2022:
|
2019 |
$350,000 |
|
2020 |
120,000 |
|
2021 |
(570,000) |
|
2022 |
180,000 |
Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate is 21% for all years.
REQUIRED:
- Prepare
journal entries for 2021 and 2022 to record the current portion and the deferred portion of income taxes, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carryforward will not be realized.
- Prepare the income tax section of the 2021 income statement beginning with the line “Income (loss before income taxes.”
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