ABC is incorporated in Delaware, E.U. In 2020, its first year of operations, ABC reported on its
Question:
ABC is incorporated in Delaware, E.U. In 2020, its first year of operations, ABC reported on its books and on its tax return an operating loss of $ 533 492. During the first two years of operations, there were NO permanent or temporary differences between book income and taxable income. The tax rate legislated for 2020 is 0.37 and for all subsequent periods a rate of 0.29 has already been legislated. The company expects to report an income of $ 693,980 by 2021 both on the payroll and on the books. Therefore, it is more than likely that the benefit of any deferred tax asset will be realized. The entry for the 2020 tax expense will include a
a. Debit to “Deferred Tax Asset” for $ 197392
b. Credit to "Income Tax Benefit" for $ 154,713
c. Debited to “Income Tax Benefit” for $ 154,713
d. Debit to “Deferred Tax Asset” for $ 201254
