Wangerin Company reported the following pretax financial income (loss) for the years 20182022. 2018..........................$240,000 2019............................350,000 2020............................120,000 2021..........................(570,000)
Question:
Wangerin Company reported the following pretax financial income (loss) for the years 2018–2022.
2018..........................$240,000
2019............................350,000
2020............................120,000
2021..........................(570,000)
2022............................180,000
Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 34% for 2018 and 2019, and 20% for 2020–2022. Assume the carryback provision is used first for net operating losses.
Instructions
a. Prepare the journal entries for the years 2020–2022 to record income tax expense, income taxes payable (refundable), and the tax effects of the loss carryback and loss carryforward, assuming no valuation allowance is needed.
b. Prepare the income tax section of the 2021 income statement beginning with the line “Income (loss) before income taxes.”
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1119503668
17th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel