Lopez Ltd. reports the following asset on the statement of financial position at 31 December 20X8:

This asset reflects the benefit of a tax loss carryforward recorded in 20X7. It was not used in 20X8. The enacted tax rate was 38%. In 20X9, the enacted tax rate changed to 40%.

Required:
1. Record 20X9 tax entries if Lopez reported accounting and taxable income of $50,000 in 20X9. The use of the tax loss carryforward is still considered to be probable.
2. Record 20X9 tax entries if Lopez reported accounting and tax losses of $220,000 in 20X9. The use of the tax loss carryforward is still considered to be probable.

Transcribed Image Text:

Deferred income tax asset, loss carryforward $334,400