Question

problem three

oblem Two: 15 points The pretax financial income (or loss) figures for John Spiller Company are as follows. 2015 2016 2017 $90,000 $100,000 50,000 8 $0310,000) 2018 2019 financial income (or loss) and taxable income(loss) were the same for all years involved. Assme a 40% $80,000 tax rate for 2015 through 2017 and a 45% tax rate for the remaining years. Required Prepare the journal entries for the ycars 2016 to 2018 to record income tax expense and the effects of the net operating loss carrybacks and carryforwards assuming the John Spiller Company uses the carryback provision (In recording the benefits of a loss carryforward, assume that no valuation account is secessary) Problem Three: The actuary for the pension plan of Gavin Inc. calculated the following beginning balance of nd gins and losses. Year 2017 Loss or (Gain) $100,000- 60,000 100,000 2019 2020 80 Other information about the company's pension obligation and plan assets (market values)is as follows PBO Plan Assets $1,000,000 1,500,000 2015 2016 2017 2018 $1,500,000 $3,000,0003200,000 000,000 3,000,000 Gavin Co. 200 employees have 4,000 total service years Required Using the average remaining service life per emp the years 2015 through 2018 based on the "corridor" amount of accumu loyee, amortize the minimum approach. Be sure to show your work

Answer 1

i) 2016 Provision for Tax A/c.... Dr$40,000 (100,000 * 40%)

To Profit and Loss A/c$40,000

2017 Provision for Tax A/c.... Dr$20,000 (50,000 * 40%)

To Profit and Loss A/c$20,000

2018 No Journal for booking Tax Expense as there is loss. But we have to carry forward loss. We will also carry back provision for tax expense of $ 139,500. Andcarry forward of loss of $ 310,000.