Required: Prepare year-end journal entries for income tax for 2020 to 2024. Assume that ITA Beverages follows IFRS, and has a year end of May 31. Any loss carryforward benefits are judged more likely than not to be realized in future years.
Loss Carryovers
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ITA Beverages Inc. has a policy of carrying back tax losses before carrying any remaining amounts forward. ITA Beverages reported the following pre-tax accounting incomes (losses) for a period of 6 years: |
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Accounting |
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Year |
Income (Loss) |
Tax Rate |
|
2019 |
$ - |
26% |
|
2020 |
$ 126,990 |
26% |
|
2021 |
$ 56,440 |
26% |
|
2022 |
$ (201,572) |
27% |
|
2023 |
$ 156,480 |
27% |
|
2024 |
$ (413,549) |
27% |
Note that income (loss) for tax purposes is the same as accounting income (loss) for all years. The income tax rate is not expected to change following the 2024 year.
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Required: |
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Prepare year-end IFRS, and has a year end of May 31. Any loss carryforward benefits are judged more likely than not to be realized in future years. |
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