Cantu Excavating was founded at the beginning of 2018. For the first seven years, the company had the taxable income and losses shown below, prior to considering any tax loss carryforwards or carrybacks. The tax rates for 2018 through 2024 were all enacted in 2018.

Year		Taxable Income (Loss)		Tax Rate
2018		$165,000		40%
2019		$175,000		30%
2020		($376,000)		31%
2021		$82,000		35%
2022		($418,000)		42%
2023		$220,000		45%
2024		$340,000		33%

Assume:

The tax rate for 2025 and 2026 is 33%.

Cantu Excavating had no permanent or temporary differences in any of the years.

You are aware in 2022 of the amount of tax payable that will be recorded in 2023.

In 2022, you will adjust the Loss carryforward benefit to reflect the tax rates in effect in 2023 and 2024.

Prepare the entries to record income tax expense for each year, 2020 through 2024. The company believes it is probable that sufficient future taxable profit will be generated to utilize the losses. Use December 31 for each entry. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). P

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To prepare the entries to record income tax expense for each year 2020 through 2024 we need to calculate the income tax expense based on the taxable i... View the full answer