19 Accounting for Income Taxes EXERCISES 19.2
E19-21 (L03) (Carryback and Carryforward of NOL, No Valuation Account, No Temporary Differences) The pretax financial income (or loss) figures for Jenny Spangler Company are as follows...
Instructions
Prepare the journal entries for the years 2014 to 2018 to record income tax expense and the effects of the net operating loss carrybacks and carryforwards assuming Jenny Spangler Company uses the carryback provision. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)
E19-22 (L03) (Two NOLs, No Temporary Differences, No Valuation Account, Entries and Income Statement) Felicia
Rashad Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2009 through 2017 as follows.
Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. Assume the carryback provision is employed for net operating losses. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized.
Instructions
(a) What entry(ies) for income taxes should be recorded for 2013?
(b) Indicate what the income tax expense portion of the income statement for 2013 should look like. Assume all income
(loss) relates to continuing operations.
(c) What entry for income taxes should be recorded in 2014?
(d) How should the income tax expense section of the income statement for 2014 appear?
(e) What entry for income taxes should be recorded in 2017?
(f) How should the income tax expense section of the income statement for 2017 appear?
E19-23 (L03) (NOL Carryback and Carryforward, Valuation Account versus No Valuation Account) Spamela Hamderson Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. (Assume the carryback provision is used for a net operating loss.)…
Instructions
(a) Prepare the journal entries for the years 2015–2018 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryback and carryforward, assuming that at the end of 2017 the benefits of the loss carryforward are judged more likely than not to be realized in the future.
(b) Using the assumption in (a), prepare the income tax section of the 2017 income statement beginning with the line “Operating loss before income taxes.”
(c) Prepare the journal entries for 2017 and 2018, assuming that based on the weight of available evidence, it is more likely than not that one-fourth of the benefits of the loss carryforward will not be realized.
(d) Using the assumption in (c), prepare the income tax section of the 2017 income statement beginning with the line “Operating loss before income taxes.”
E19-24 (L03) (NOL Carryback and Carryforward, Valuation Account Needed) Beilman Inc. reports the following pretax income (loss) for both book and tax purposes. (Assume the carryback provision is used where possible for a net operating loss.)…
Instructions
(a) Prepare the journal entries for years 2015–2018 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryback and 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.
(b) Prepare the income tax section of the 2017 income statement beginning with the line “Operating loss before income taxes.”
(c) Prepare the income tax section of the 2018 income statement beginning with the line “Income before income taxes.”
E19-25 (L03) (NOL Carryback and Carryforward, Valuation Account Needed) Meyer reported the following pretax financial income (loss) for the years 2015–2019...
Instructions
(a) Prepare the journal entries for the years 2017–2019 to record income tax expense, income taxes payable (refundable), and the tax effects of the loss carryback and 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.
(b) Prepare the income tax section of the 2018 income statement beginning with the line “Income (loss) before income taxes.”
