The pretax financial income (or loss) figures for Indigo Company
are as follows.
2015 |
$164,000 | ||
2016 |
275,000 | ||
2017 |
86,000 | ||
---|---|---|---|
2018 |
(164,000 | ) | |
2019 |
(390,000 | ) | |
2020 |
113,000 | ||
2021 |
98,000 |
Pretax financial income (or loss) and taxable income (loss) were
the same for all years involved. Assume a 25% tax rate for 2015 and
2016 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.
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