Question

In: Accounting

Concord Inc. reported the following pretax income (loss) and related tax rates during the years 2013–2019....

Concord Inc. reported the following pretax income (loss) and related tax rates during the years 2013–2019.

Pretax Income (Loss) Tax Rate
2013 $37,000 30%
2014 $24,700 30%
2015 $50,100 30%
2016 $81,000 40%
2017 ($176,500) 45%
2018 $72,800 40%
2019 $109,800 35%

Pretax financial income (loss) and taxable income (loss) were the same for all years since Concord began business. The tax rates from 2016–2019 were enacted in 2016.

Prepare the journal entries for the years 2017–2019 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryback and carryforward. Assume that Concord elects the carryback provision where possible and expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year.

Prepare the portion of the income statement, starting with “Operating loss before income taxes,” for 2017.

Prepare the portion of the income statement, starting with “Income before income taxes,” for 2018.

Solutions

Expert Solution

Journal entries

Date

Account titles and explanation

Debit

Credit

2017

Income Tax Refund Receivable 2015 ($50100 × 30%)

15030

Income Tax Refund Receivable 2016 ($81000 × 40%)

32400

Benefit Due to Loss Carryback

47430

2017

Deferred Tax Asset [($176500-$50100-$81000) × 40%] = (45400*40%)

18160

Benefit Due to Loss Carryforward

18160

2018

Income Tax Expense

29120

Deferred Tax Asset

18160

Income Tax Payable [($72800-45400) × 40%]

10960

2019

Income Tax Expense

38430

Income Tax Payable ($109800 × 35%)

38430

2017 Income statement

Operating loss before income taxes

(176500)

Income tax benefit

Benefit due to loss carryback

47430

Benefit due to loss carryforward

18160

65590

Net loss

110910

2018 income statement

Income before income taxes

72800

Income tax expense

Current

10960

Deferred

18160

(29120)

Net income

43680


Related Solutions

Concord Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022....
Concord Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $70,400 40 % 2020 (158,400) 40 % 2021 176,000 20 % 2022 88,000 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Concord began business. The tax rates from 2019–2022 were enacted in 2019. 1. Prepare the journal entries for the years 2020–2022 to record income taxes payable (refundable), income...
ivanhoe Inc. reported the following pretax income (loss) and related tax rates during the years 2013–2019....
ivanhoe Inc. reported the following pretax income (loss) and related tax rates during the years 2013–2019. Pretax Income (loss) Tax Rate 2013 $37,700 30 % 2014 23,100 30 % 2015 54,100 30 % 2016 76,800 40 % 2017 (166,200 ) 45 % 2018 76,200 40 % 2019 94,100 35 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Ivanhoe began business. The tax rates from 2016–2019 were enacted in 2016. Prepare the journal...
Nash Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022....
Nash Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $65,600 40 % 2020 (147,600) 40 % 2021 164,000 20 % 2022 82,000 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Nash began business. The tax rates from 2019–2022 were enacted in 2019. Prepare the journal entries for the years 2020–2022 to record income taxes payable (refundable), income tax...
Waterway Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022....
Waterway Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $92,800 40 % 2020 (208,800) 40 % 2021 232,000 20 % 2022 116,000 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Waterway began business. The tax rates from 2019–2022 were enacted in 2019. a.  Prepare the journal entries for the years 2020-2022 to record income taxes payable (refundable), income tax...
Tamarisk Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022....
Tamarisk Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $88,000 40 % 2020 (198,000) 40 % 2021 220,000 20 % 2022 110,000 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Tamarisk began business. The tax rates from 2019–2022 were enacted in 2019. Prepare the journal entries for the years 2020–2022 to record income taxes payable (refundable), income tax...
Whispering Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022....
Whispering Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $104,000 40 % 2020 (234,000) 40 % 2021 260,000 20 % 2022 130,000 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Whispering began business. The tax rates from 2019–2022 were enacted in 2019. Partially correct answer iconYour answer is partially correct. Prepare the journal entries for the years 2020–2022...
Whispering Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022....
Whispering Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $104,000 40 % 2020 (234,000) 40 % 2021 260,000 20 % 2022 130,000 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Whispering began business. The tax rates from 2019–2022 were enacted in 2019. New attempt is in progress. Some of the new entries may impact the last attempt grading.Your...
Bramble Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022....
Bramble Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $43,300 40 % 2020 (194,000) 40 % 2021 244,000 20 % 2022 72,300 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Bramble began business. The tax rates from 2019–2022 were enacted in 2019. (a) Prepare the journal entries for the years 2020–2022 to record income taxes payable (refundable), income...
Bramble Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022....
Bramble Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $84,800 40 % 2020 (190,800) 40 % 2021 212,000 20 % 2022 106,000 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Bramble began business. The tax rates from 2019–2022 were enacted in 2019. Prepare the journal entries for the years 2020–2022 to record income taxes payable (refundable), income tax...
Riverbed Inc. reported the following accounting income (loss) and related tax rates during the years 2015...
Riverbed Inc. reported the following accounting income (loss) and related tax rates during the years 2015 to 2021: Accounting Tax Year Income (Loss) Rate 2015 $72,000 25% 2016 29,000 25% 2017 62,000 25% 2018 77,000 30% 2019 (220,000 ) 35% 2020 68,000 30% 2021 94,000 25% Accounting income (loss) and taxable income (loss) were the same for all years since Riverbed began business. The tax rates from 2018 to 2021 were enacted in 2018. Assume Riverbed Inc. follows ASPE for...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT