On December 31st 2023 crane Inc has taxable temporary difference of 2.09 million and deferred tax liability of $585,200. These temporary differences are due to Crane having claim CCA in excess of book depreciation in prior years. Crane's year end is December 31st. At the end of the December 2023 crane's substantively enacted tax rate of 2023 and future years was changed to 30%.

For the year and December 31st 2023 Crane's accounting loss before tax was $488,500. The following data are also available:

1. Pension expense was $92,000 pension plan contributions were $114,300 for the year. Only actual pension contributions are deductible for tax.

2. Business meals and entertainment were 35,800. They are one-half deductible for tax purposes.

3. For the 3 years ended December 31st 2022 Crane had cumulative, total taxable income of $125,500 and total income current tax expense income tax payable of $35,140

4. During 2023 the company booked estimated warranty cost of $27,700 and these costs are not likely to be incurred until 2027.

5. In 2023 the company incurred 172,000 of development costs only 50% of which are deductible for tax purposes

6. Company management has determined that it is probable that only one half of any loss carryforward at the end of 2023 will be realized.

7. In 2023 the amount claimed of depreciation was equal to the amount claimed for CCA.

Prepare the journal entrance to record income taxes for the year ended December 31st 2023 and the income tax reconciliation note.

Date

December 31, 2023

?

?

(To record benefit from carryback)

December 31, 2023

?

?

(To record deferred tax expense for change in rates)

December 31, 2023

?

?

(To record deferred tax benefit)

December 31, 2023

?

?

(To record deferred tax benefit from loss carryforward)

CRANE INC.

Income Tax Reconciliation Statement

Dec 31, 2023

@30% /Accounting loss

Loss before taxes $? $ ? ?%

Non-deductible:

Development costs ? ? ?

Meals/Entertainment ? ? ?

Tax rate adjustment on ? ? ?

reversing differences

of Loss carryforward ? ? ?

(recovery not probable)

Tax rate adjustment on loss ? ? ?

Carryback

? ?

Effective tax rate ?