Question

Exercise 19-23 (Part Level Submission) Spamela Hamderson Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Year Pretax Income (Loss) Tax Rate 2018 $120,000 17 % 2019 90,000 17 % 2020 (280,000 ) 19 % 2021 300,000 19 % The tax rates listed were all enacted by the beginning of 2018.

(a) Your answer is partially correct. Try again. Prepare the journal entries for the years 2018–2021 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryforward, assuming that at the end of 2020 the benefits of the loss carryforward are judged more likely than not to be realized in the future. (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.) Date Account Titles and Explanation Debit Credit 2018 2019 2020 2021

Answer 1

Date	Account Titles and Explantion	Debit	Credit
2018	Income Tax Expense	$20,400
	Income Tax Payable ($120,000 * 17%)		$20,400
	[To record expense payable]
2019	Income Tax Expense	$15,300
	Income Tax Payable ($90,000 * 17%)		$15,300
	[To record expense payable]
2020	Income Tax Refund Receivable (20400+15300)	$35,700
	Deferred Tax Asset (280000-120000-90000)*19%	$13,300
	Benefit due to loss Carryback		$35,700
	Benefit due to Loss Carryforward		$13,300
	[To record refund]
2021	Income Tax Expense ($300,000 * 19%)	$57,000
	Income Tax Payable		$43,700
	Deferred Tax Asset		$13,300
	[To record expense payable]