The accounting income (loss) figures for Pronghorn Corporation are as follows: 2015 $162,000 2016 242,000 I 2017 82,000 2018 (162,000) 2019 (382,000) 2020 2021 140,000 154,000 Accounting income (loss) and taxable income (loss) were the same for all years involved. Assume a 30% tax rate for 2015 and 2016, and a 25% tax rate for the remaining years. Prepare the journal entries for each of the years 2017 to 2021 to record income tax expense and the effects of the tax loss carrybacks and carryforwards, assuming Pronghorn Corporation uses the carryback provision first. All income and losses relate to normal operations and it is more likely than not that the company will generate substantial taxable income in the future.
The accounting income (loss) figures for Pronghorn Corporation are as follows: 2015 $162,000 2016 242,000 I 2017 82,000 2018 (162,000) 2019 (382,000) 2020 2021 140,000 154,000 Accounting income (loss) and taxable income (loss) were the same for all years involved. Assume a 30% tax rate for 2015 and 2016, and a 25% tax rate for the remaining years. Prepare the journal entries for each of the years 2017 to 2021 to record income tax expense and the effects of the tax loss carrybacks and carryforwards, assuming Pronghorn Corporation uses the carryback provision first. All income and losses relate to normal operations and it is more likely than not that the company will generate substantial taxable income in the future.
Chapter6: Deductions And Losses: In General
Section: Chapter Questions
Problem 56P
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Transcribed Image Text:The accounting income (loss) figures for Pronghorn Corporation are as follows:
2015
$162,000
2016
242,000
I
2017
82,000
2018
(162,000)
2019
(382,000)
2020
2021
140,000
154,000
Accounting income (loss) and taxable income (loss) were the same for all years involved. Assume a 30% tax rate for 2015 and 2016,
and a 25% tax rate for the remaining years.
Prepare the journal entries for each of the years 2017 to 2021 to record income tax expense and the effects of the tax loss
carrybacks and carryforwards, assuming Pronghorn Corporation uses the carryback provision first. All income and losses relate to
normal operations and it is more likely than not that the company will generate substantial taxable income in the future.
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