E19.2 (LO 1, 2) (Two Differences, No Beginning Deferred Taxes, Tracked through 2 Years) The following information is available for Wenger Corporation for 2019 (its first year of operations) 1. Excess of tax depreciation over book depreciation, $40,000. This $40,000 difference will reverse equally over the years 2020-2023 2. Deferral, for book purposes of $20,000 of rent received in advance. The rent will be recognized in 2020 3. Pretax financial income, $300,000. 4. Tax rate for all years, 20% Instructions a. Compute taxable income for 2019 b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019 c. Prepare the journal entry to record income tax expense, deferred income taxes and income taxes payable for 2020. assuming taxable income of $325.000 E19.23 (LO 3) (NOL Carryforward, Valuation Account versus No Valuation Account) Spamela Hamderson Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Year Pretax Income (Loss) Tax Rate 2018 $120,000 17% 2019 90,000 2020 (280,000) 19 2021 300,000 19 The tax rates listed were all enacted by the beginning of 2018 Instructions a. Prepare the journal entries for the years 2018-2021 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryforward, assuming that at the end of 2020 the benefits of the loss carryforward are judged more likely than not to be realized in the future b. Using the assumption in (a), prepare the income tax section of the 2020 income statement beginning with the line "Operating loss before income taxes." Prepare the journal entries for 2020 and 2021, assuming that based on the weight of available evidence, it is more likely than not that one-fourth of the benefits of the loss carryforward will not be realized. d. Using the assumption in (c), prepare the income tax section of the 2020 income statement beginning with the line "Operating loss before income taxes." C