The pretax financial income (or loss) figures for Whispering Company are as follows. 2016 325,000 2017 104,000 2018 (208,000 ) 2019 (128,000 ) 2020 164,000 2021 124,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2016, and a 20% tax rate for the remaining years. Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carrybacks and carryforwards assuming Whispering Company uses the carryback provision. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)
The pretax financial income (or loss) figures for Whispering Company are as follows. 2016 325,000 2017 104,000 2018 (208,000 ) 2019 (128,000 ) 2020 164,000 2021 124,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2016, and a 20% tax rate for the remaining years. Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carrybacks and carryforwards assuming Whispering Company uses the carryback provision. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The pretax financial income (or loss) figures for Whispering Company are as follows.
| 2016 | 325,000 | ||
| 2017 | 104,000 | ||
| 2018 | (208,000 | ) | |
| 2019 | (128,000 | ) | |
| 2020 | 164,000 | ||
| 2021 | 124,000 |
Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2016, and a 20% tax rate for the remaining years.
Prepare the
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