Question

View Policies Current Attempt in Progress Shamrock Corporation has pretax financial income (or loss) from 2015 through 2021 as follows. 2015 2016 2017 2018 2019 2020 2021 Income (Loss) Tax Rate $58,560 25 % (183,000) 20% 109,800, 20% 36,600 20% 128,100 20% (73,200) 25 % 73,200 25% Pretax financial income (loss) and taxable income (loss) were the same for all years since Shamrock has been in business. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized. What entries for income taxes should be recorded for 2016? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account tities and enter for the amounts.) Account Titles and Explanation Debit Credit e Textbook and Media

Answer 1

Credit Year Journal Entries - Shamrock Year Particulars 2016 Receivables - Income Tax Refund Income tax benefit - Net Operating Loss To record cary back Debit 14,640 14,640 Pretax Income(loss) 58,560 (183,000) 109,800 36,600 128,100 (73,200) 73,200 Tax rate 25% 20% 20% 20% 20% 25% 25% Tax 14,640 Carry back in 2016 (36,600) 21,960 7,320 25,620 18,300 Carry back in 2020 (18,300) 18,300 24,888 Deferred tax asset (183,000-58,560).20 Benefit due to loss carried forward To record cary forward 24,888 21,960 2017 Income tax expense (109,800*20%) Deferred tax assets 21,960 18,300 2020 Receivables - Income Tax Refund Income tax benefit - Net Operating Loss To record cary back 18,300 Income Statement - Shamrock For the year ended 2016 Particulars Operating Income (loss) before income tax Income tax benefit - Net operating loss Income tax benefit - Deferred Tax Assets Net Operating Income (Loss) Amount (183,000) 14,640 24,888 (143,472) Income Statement - Shamrock For the year ended 2017 Particulars Operating Income (loss) before income tax Current year tax Income tax benefit - Deferred Tax Assets Net Operating Income (Loss) Amount 109,800 21,960 87,840 Income Statement - Shamrock For the year ended 2020 Particulars Operating Income (loss) before income tax Amount (73,200) Income tax benefit - Deferred Tax Assets 18,300 Net Operating Income (Loss) (54,900)