Bonita Inc. reports the following pretax income (loss) for both book and tax purposes.PretaxYearIncome (Loss)Tax Rate2018$124,00020 %201986,00020 %2020(89,000 )25 %2021126,00025 %The tax rates listed were all enacted by the beginning of 2018.Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable, and the taxeffects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half ofthe benefits of the loss carryforward will not be realized. (Credit account titles are automatically indented when amount is entered. Donot indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

The amount of cost recognized by a business in an accounting period for the government tax on its…

Bonita Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) Tax Rate 2018 $124,000 20 % 2019 86,000 20 % 2020 (89,000 ) 25 % 2021 126,000 25 % The tax rates listed were all enacted by the beginning of 2018.

Bonita Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) Tax Rate 2018 $124,000 20 % 2019 86,000 20 % 2020 (89,000 ) 25 % 2021 126,000 25 % The tax rates listed were all enacted by the beginning of 2018.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 12P

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Bonita Inc. reports the following pretax income (loss) for both book and tax purposes.
Pretax
Year
Income (Loss)
Tax Rate
2018
$124,000
20 %
2019
86,000
20 %
2020
(89,000 )
25 %
2021
126,000
25 %
The tax rates listed were all enacted by the beginning of 2018.
Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and 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-half 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 0 for the amounts.)

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