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On 1 January 20X7, Change Incorporated commenced business operations. At 31 December 20X9, the following information relates to Chang: Earnings (loss) before tax Tax rate (enacted in each year) Depreciation expense (asset cost was $610,000) Capital cost allowance Dividends received (nontaxable) Golf club dues 20x8 20x7 $304,900 $(456,100) View transaction list 30% 51,000 183,000 38,600 9,700 358 51,000 0 60,500 9,700 20x9 $725,000 40% 51,000 79,000 60,500 9,700 Required: 1. Prepare journal entries to record tax for 20X7, 20X8, and 20X9. Assume that the loss carryforward usage in 20X8 is considered to be probable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

On 1 January 20X7, Change Incorporated commenced business operations. At 31 December 20X9, the following information relates to Chang: Earnings (loss) before tax Tax rate (enacted in each year) Depreciation expense (asset cost was $610,000) Capital cost allowance Dividends received (nontaxable) Golf club dues 20x8 20x7 $304,900 $(456,100) View transaction list 30% 51,000 183,000 38,600 9,700 358 51,000 0 60,500 9,700 20x9 $725,000 40% 51,000 79,000 60,500 9,700 Required: 1. Prepare journal entries to record tax for 20X7, 20X8, and 20X9. Assume that the loss carryforward usage in 20X8 is considered to be probable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

FINANCIAL ACCOUNTING
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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2. Prepare journal entries to record tax for 20X7, 20X8, and 20X9. Assume that the loss carryforward usage in 20X8 is not considered to be probable but is considered to be probable in 20X9. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 Record entry for current and deferred income tax expense payable. Note: Enter debits before credits. Date 20X7 General Journal Income tax expense Income tax payable Deferred income tax Record entry Clear entry Debit Credit View general journal >
Transcribed Image Text:2. Prepare journal entries to record tax for 20X7, 20X8, and 20X9. Assume that the loss carryforward usage in 20X8 is not considered to be probable but is considered to be probable in 20X9. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 Record entry for current and deferred income tax expense payable. Note: Enter debits before credits. Date 20X7 General Journal Income tax expense Income tax payable Deferred income tax Record entry Clear entry Debit Credit View general journal >
On 1 January 20X7, Change Incorporated commenced business operations. At 31 December 20X9, the following information relates to Chang: Earnings (loss) before tax Tax rate (enacted in each year) Depreciation expense (asset cost was $610,000) Capital cost allowance. Dividends received (nontaxable) Golf club dues View transaction list Journal entry worksheet 1 2 Date 20X7 Note: Enter debits before credits. Record entry for current and deferred income tax expense payable. 20x8 20X7 $304,900 $(456,100) General Journal Required: 1. Prepare journal entries to record tax for 20X7, 20X8, and 20X9. Assume that the loss carryforward usage in 20X8 is considered to be probable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Income tax expense Income tax payable Deferred income tax 51,000 183,000 38,600 9,700 30% Debit 35% Credit 51,000 0 60,500 9,700 20x9 $725,000 40% 51,000 79,000 60,500 9,700
Transcribed Image Text:On 1 January 20X7, Change Incorporated commenced business operations. At 31 December 20X9, the following information relates to Chang: Earnings (loss) before tax Tax rate (enacted in each year) Depreciation expense (asset cost was $610,000) Capital cost allowance. Dividends received (nontaxable) Golf club dues View transaction list Journal entry worksheet 1 2 Date 20X7 Note: Enter debits before credits. Record entry for current and deferred income tax expense payable. 20x8 20X7 $304,900 $(456,100) General Journal Required: 1. Prepare journal entries to record tax for 20X7, 20X8, and 20X9. Assume that the loss carryforward usage in 20X8 is considered to be probable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Income tax expense Income tax payable Deferred income tax 51,000 183,000 38,600 9,700 30% Debit 35% Credit 51,000 0 60,500 9,700 20x9 $725,000 40% 51,000 79,000 60,500 9,700
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