Question:Jennings Inc. reported the following pretax income (loss) and
related tax rates during the years 2019–2022....
Question
Jennings Inc. reported the following pretax income (loss) and
related tax rates during the years 2019–2022....
Jennings Inc. reported the following pretax income (loss) and
related tax rates during the years 2019–2022.
Pretax Income (loss)
Tax Rate
2019
$80,000
40
%
2020
(180,000)
40
%
2021
230,000
20
%
2022
100,000
20
%
Pretax financial income (loss) and taxable income (loss) were the
same for all years since Jennings began business. The tax rates
from 2019–2022 were enacted in 2019.
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Prepare the journal entries for the years 2020–2022 to record
income taxes payable (refundable), income tax expense (benefit),
and the tax effects of the loss carryforward. Assume that Jennings
expects to realize the benefits of any loss carryforward in the
year that immediately follows the loss year. (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.)
Date
Account Titles and Explanation
Debit
Credit
2020
2021
2022
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Prepare the portion of the income statement, starting with
“Operating loss before income taxes,” for 2020. (Enter
negative amounts using either a negative sign preceding the number
e.g. -45 or parentheses e.g. (45).)
Jennings Inc.
Income Statement (Partial)
December 31, 2020For the Year Ended December 31, 2020For the
Quarter Ended December 31, 2020
DividendsExpensesIncome Tax BenefitIncome Tax Expense - Loss
CarryforwardIncome Tax Expense - Loss CarrybackNet Income /
(Loss)Operating Loss before Income TaxesRetained Earnings, January
1Retained Earnings, December 31RevenuesTotal ExpensesTotal
Revenues
$
DividendsExpensesIncome Tax BenefitIncome Tax Expense - Loss
CarryforwardIncome Tax Expense - Loss CarrybackNet Income /
(Loss)Operating Loss before Income TaxesRetained Earnings, January
1Retained Earnings, December 31RevenuesTotal ExpensesTotal
Revenues
DividendsExpensesIncome Tax BenefitIncome Tax Expense - Loss
CarryforwardIncome Tax Expense - Loss CarrybackNet Income /
(Loss)Operating Loss before Income TaxesRetained Earnings, January
1Retained Earnings, December 31RevenuesTotal ExpensesTotal
Revenues
DividendsExpensesIncome Tax BenefitIncome Tax Expense - Loss
CarryforwardIncome Tax Expense - Loss CarrybackNet Income /
(Loss)Operating Loss before Income TaxesRetained Earnings, January
1Retained Earnings, December 31RevenuesTotal ExpensesTotal
Revenues