Bramble Inc. incurred a net operating loss of $ 577,300 in 2020. Combined income for 2017, 2018, and 2019 was $ 457,000. The tax rate for all years is 30%. Assume that it is more likely than not that the entire tax loss carryforward will not be realized in future years.

1- what is the journal entry that is necessary at the end of 2020 assuming that Bramble does not use a valuation allowance account.

2- what is the journal entries that are necessary at the end of 2020 assuming that Bramble does use a valuation allowance account.
a-for recognizing benefit of loss carryback
b-for recognizing benefit of loss carryforward
c-for bringing the deferred tax asset account to its realizable value

Answer rating: 100% (QA)

SOLUTION 1 Journal entry necessary at the end of 2020 assuming Bramble does not use a valuation allo... View the full answer