January 20X7, Change Incorporated commenced business operations. At 31 December 20X9, the following information relates to Chang: Earnings (loss) before tax Tax rate (enacted in each year) Depreciation expense (asset cost was $610,000) Capital cost allowance Dividends received (nontaxable) Golf club dues 20x7 $304,900 30% 51,000 183,000 38,600 9,700 20x8 $(456,100) 358 51,000 0 60,500 9,700 20x9 $725,000 40% 51,000 79,000 60,500 9,700 Required: 1. Prepare journal entries to record tax for 20X7, 20X8, and 20X9. Assume that the loss carryforward usage in 20X8 is considered to be probable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
January 20X7, Change Incorporated commenced business operations. At 31 December 20X9, the following information relates to Chang: Earnings (loss) before tax Tax rate (enacted in each year) Depreciation expense (asset cost was $610,000) Capital cost allowance Dividends received (nontaxable) Golf club dues 20x7 $304,900 30% 51,000 183,000 38,600 9,700 20x8 $(456,100) 358 51,000 0 60,500 9,700 20x9 $725,000 40% 51,000 79,000 60,500 9,700 Required: 1. Prepare journal entries to record tax for 20X7, 20X8, and 20X9. Assume that the loss carryforward usage in 20X8 is considered to be probable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 48P
Related questions
Question
Transcribed Image Text:On 1 January 20X7, Change Incorporated commenced business operations. At 31 December 20X9, the
following information relates to Chang:
Earnings (loss) before tax
Tax rate (enacted in each year)
Depreciation expense (asset cost was $610,000)
Capital cost allowance.
Dividends received (nontaxable)
Golf club dues
View transaction list
Journal entry worksheet
1
2
Date
20X7
Note: Enter debits before credits.
Record entry for current and deferred income tax expense payable.
20x8
20X7
$304,900 $(456,100)
General Journal
Required:
1. Prepare journal entries to record tax for 20X7, 20X8, and 20X9. Assume that the loss carryforward usage
in 20X8 is considered to be probable. (If no entry is required for a transaction/event, select "No journal
entry required" in the first account field.)
Income tax expense
Income tax payable
Deferred income tax
51,000
183,000
38,600
9,700
30%
Debit
35%
Credit
51,000
0
60,500
9,700
20x9
$725,000
40%
51,000
79,000
60,500
9,700
Transcribed Image Text:2. Prepare journal entries to record tax for 20X7, 20X8, and 20X9. Assume that the loss carryforward usage in 20X8 is not
considered to be probable but is considered to be probable in 20X9. (If no entry is required for a transaction/event, select
"No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
1 2 3
Record entry for current and deferred income tax expense payable.
Note: Enter debits before credits.
Date
20X7
General Journal
Income tax expense
Income tax payable
Deferred income tax
Record entry
Clear entry
Debit
Credit
View general journal
>
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