Nueve Ltd. had the following pre-tax earnings and losses: Year Pre-tax Earnings (Loss) Tax Rate 20X3 $
Question:
Nueve Ltd. had the following pre-tax earnings and losses:
Year | Pre-tax Earnings (Loss) | Tax Rate | |||||||
20X3 | $ | 360,000 | 35 | % | |||||
20X4 | 195,000 | 35 | |||||||
20X5 | 570,000 | 35 | |||||||
20X6 | 690,000 | 37 | |||||||
20X7 | (3,360,000 | ) | 37 | ||||||
20X8 | 405,000 | 37 | |||||||
20X9 | 945,000 | 40 | |||||||
The tax rates are those effective for the year indicated. The rates were enacted the year in which they became effective. Taxable income (loss) was equal to accounting earnings (loss) in each year.
Required:
1. Prepare the entry to record income tax expense for 20X7. At the end of 20X7, management estimates it is probable Nueve will utilize only $235,000 of the loss carryforward. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
a) Record the entry for income expense and loss of carryforward.
2. Prepare the entry to record income tax expense for 20X8 and 20X9. At the end of 20X8, management estimates it is probable Nueve will utilize the entire loss carryforward, not just the $235,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
a) the entry for income tax and use loss of carrryforword.
b)Record the entry for use loss of carryforword.
c) Record the entry for income tax expense.
please answer to al the parts of the question. thanks