Cullumber Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: Year 2021 2022 2023 2024 Accounting Income (Loss) $128,000 93,000 (300,000) 219,000 (a) Tax Rate 25 % 25 % 30 % 30 % The tax rates listed were all enacted by the beginning of 2021. Cullumber reports under the ASPE future income taxes method. Assume that Cullumber uses a valuation allowance to account for future tax assets, and also that it is more likely than not that 25% of the carryforward benefits will not be realized. Prepare the journal entries for 2023 and 2024. (List all debit entries before
Cullumber Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: Year 2021 2022 2023 2024 Accounting Income (Loss) $128,000 93,000 (300,000) 219,000 (a) Tax Rate 25 % 25 % 30 % 30 % The tax rates listed were all enacted by the beginning of 2021. Cullumber reports under the ASPE future income taxes method. Assume that Cullumber uses a valuation allowance to account for future tax assets, and also that it is more likely than not that 25% of the carryforward benefits will not be realized. Prepare the journal entries for 2023 and 2024. (List all debit entries before
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 18E
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