Question

The pretax financial income (or loss) figures for Marin Company are as follows.

2017		72,000
2018		(37,000	)
2019		(32,000	)
2020		110,000
2021		93,000

Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 25% tax rate for 2017 and a 20% tax rate for the remaining years.

Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carryforwards. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
2017
enter an account title to record carryback	enter a debit amount	enter a credit amount
enter an account title to record carryback	enter a debit amount	enter a credit amount
2018
enter an account title to record carryforward	enter a debit amount	enter a credit amount
enter an account title to record carryforward	enter a debit amount	enter a credit amount
2019
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
2020
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a debit amount
2021
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a credit amount	enter a debit amount

Answer 1

Answer:

Date	Particulars	Debit	Credit
2017	Income tax expense(72000*25%)	$18000
	Income Tax payable		$18000
2018	Deferred tax asset(37000*20%)	$7400
	Income tax expense		$7400
2019	Deferred tax asset(32000*20%)	$6400
	Income tax expense		$6400
2020	Income tax expense(110000*20%)	$22000
	Deferred tax asset		$13800
	Income Tax payable (22000-7400-6400)		$8200
2021	Income tax expense(93000*20%)	$18600
	Income Tax Payable		$18600