Wangerin Company reported the following pretax financial income (loss) for the years 2018–2022. 2018 $240,000) 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 was 34% for 2018 and 2019, and 20% for 2020–2022. Assume the carryback provision is used first for net operating losses. Instructions a. Prepare the journal entries for the years 2020–2022 to record income tax expense, income taxes payable (refundable), and the tax effects of the loss carryback and loss carryforward, assuming no valuation allowance is needed. b. Prepare the income tax section of the 2021 income statement beginning with the line “Income (loss) before income taxes.”
Wangerin Company reported the following pretax financial income (loss) for the years 2018–2022.
| 2018 |
$240,000)
|
| 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 was 34% for 2018 and 2019, and 20% for 2020–2022. Assume the carryback provision is used first for net operating losses.
Instructions
a. Prepare the
b. Prepare the income tax section of the 2021 income statement beginning with the line “Income (loss) before income taxes.”
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