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.

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.

 

Transcribed Image Text:

Spamela Hamderson Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Pretax Income Year (Loss) Tax Rate $120,000 90,000 (280,000) 300,000 2018 17% 2019 17% 2020 19% 2021 19% The tax rates listed were all enacted by the beginning of 2018. Spamela Hamderson Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Pretax Income Year (Loss) Tax Rate $120,000 90,000 (280,000) 300,000 2018 17% 2019 17% 2020 19% 2021 19% The tax rates listed were all enacted by the beginning of 2018.

Answer rating: 100% (QA)

Date Account Titles and Explanation Debit Credit 2021 Incom... View the full answer