Question

Nash reported the following pretax financial income (loss) for the years 2020-2022. 2020 2021 2022 $98,400 (116,000) 147,600 Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 20% for 2020-2022 (a) Prepare the journal entries for the years 2020-2022 to record income tax expense, income taxes payable, and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carryforward will not be realized. (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 titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit 2020 2021 (To record refund)

Answer 1

solution - credit Debit Date Account Title and explanation 2020 Income Tase expanses (98400x 20) $19680 1419680 Income tax payable (Being to record the income tax expanse) 2021 $23700 $23200 Deferred taz asset (16000 x 200) Income tax expenses or benefit due to loss carry forward (Being to record refund) Income fare expense or benefit due to loss (23200X 20% ) У $4640 Allowance to reduce deferred tox Subuo asser (Being to record the allowance) 2022 Income tax expense (147600x20%) $29520 Income tax payable (147600- 116000 120/ Defessed to assets being to record the ancome tax expense and deferred asset set off) Allowance to reduce deffered tard Asset Income tax expenie or Benefit due to loss carry forward "Being to reversal of allowance ald! $6320 $23200 16 aguo $4640