Question: Using the information provided in E17- 17, now assume that in year 8 DiVito determined that it is more likely than not that it will

Using the information provided in E17- 17, now assume that in year 8 DiVito determined that it is more likely than not that it will only earn $ 50,000 in the future to be used to offset the net operating loss carryforward.

Required
a. Prepare the journal entries necessary to record the tax provision for years 8 through 10.
b. Prepare the footnote, in both dollars and percentages, required to reconcile DiVito’s federal tax rate to its effective income tax rate for years 8 through 10.

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a Year 8 Account December 31 Year 8 Income Tax Refund Receivable 5250 Income Tax Benefit 5250 Account December 31 Year 8 Deferred Tax Asset 94000 Inco... View full answer

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