Prepare the journal entries for the years 2020-2022 to record income tax expense, income taxes payable, and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carryforward will not be realized. (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 O for the amounts.) Date Account Titles and Explanation 2020 Income Tax Expense Income Tax Payable 2021 Income Tax Refund Receivable Deferred Tax Asset 2022 (To record refund) Benefit Due to Loss Carryforward Allowance to Reduce Deferred Tax Asset to Expected Realiz (To record allowance) Income Tax Expense Deferred Tax Asset Income Tax Payable (To record income taxes) Allowance to Reduce Deferred Tax Asset to Expected Realiz Benefit Due to Loss Carryforward (To adjust allowance) Debit 23520 23520 4280 Credit 23520 Metlock Company reported the following pretax financial income (loss) for the years 2018-2022. 2018 $235,200 2019 343,000 2020 117,600 2021 (558,600) 2022 176,400 Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 34% for 2018 and 2019, and 20% for 2020-2022. Assume the carryback provision is used first for net operating losses. SUPPO
Prepare the journal entries for the years 2020-2022 to record income tax expense, income taxes payable, and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carryforward will not be realized. (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 O for the amounts.) Date Account Titles and Explanation 2020 Income Tax Expense Income Tax Payable 2021 Income Tax Refund Receivable Deferred Tax Asset 2022 (To record refund) Benefit Due to Loss Carryforward Allowance to Reduce Deferred Tax Asset to Expected Realiz (To record allowance) Income Tax Expense Deferred Tax Asset Income Tax Payable (To record income taxes) Allowance to Reduce Deferred Tax Asset to Expected Realiz Benefit Due to Loss Carryforward (To adjust allowance) Debit 23520 23520 4280 Credit 23520 Metlock Company reported the following pretax financial income (loss) for the years 2018-2022. 2018 $235,200 2019 343,000 2020 117,600 2021 (558,600) 2022 176,400 Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 34% for 2018 and 2019, and 20% for 2020-2022. Assume the carryback provision is used first for net operating losses. SUPPO
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Prepare the journal entries for the years 2020-2022 to record income tax expense, income taxes payable, and the tax effects of
the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the
benefits of the loss carryforward will not be realized. (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 O for the amounts.)
Date Account Titles and Explanation
2020
Income Tax Expense
Income Tax Payable
2021
Income Tax Refund Receivable
Deferred Tax Asset
2022
(To record refund)
Benefit Due to Loss Carryforward
Allowance to Reduce Deferred Tax Asset to Expected Realiz
(To record allowance)
Income Tax Expense
Deferred Tax Asset
Income Tax Payable
(To record income taxes)
Allowance to Reduce Deferred Tax Asset to Expected Realiz
Benefit Due to Loss Carryforward
(To adjust allowance)
Debit
23520
23520
4280
Credit
23520
Transcribed Image Text:Metlock Company reported the following pretax financial income (loss) for the years 2018-2022.
2018
$235,200
2019
343,000
2020
117,600
2021 (558,600)
2022
176,400
Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 34% for 2018
and 2019, and 20% for 2020-2022. Assume the carryback provision is used first for net operating losses.
SUPPO
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