Bonita Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) Tax Rate 2018 $124,000 20 % 2019 86,000 20 % 2020 (89,000 ) 25 % 2021 126,000 25 % The tax rates listed were all enacted by the beginning of 2018.
Bonita Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) Tax Rate 2018 $124,000 20 % 2019 86,000 20 % 2020 (89,000 ) 25 % 2021 126,000 25 % The tax rates listed were all enacted by the beginning of 2018.
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 2EA: Consider the following accounts and determine if the account is a current liability, a noncurrent...
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![Bonita Inc. reports the following pretax income (loss) for both book and tax purposes.
Pretax
Year
Income (Loss)
Tax Rate
2018
$124,000
20 %
2019
86,000
20 %
2020
(89,000 )
25 %
2021
126,000
25 %
The tax rates listed were all enacted by the beginning of 2018.
Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable, and the tax
effects of the 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. (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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3026c80a-ee56-408d-84cb-6926daa812fd%2Fcda44d12-070c-446b-9630-8280c1ea320d%2F8u65d09_processed.png&w=3840&q=75)
Transcribed Image Text:Bonita Inc. reports the following pretax income (loss) for both book and tax purposes.
Pretax
Year
Income (Loss)
Tax Rate
2018
$124,000
20 %
2019
86,000
20 %
2020
(89,000 )
25 %
2021
126,000
25 %
The tax rates listed were all enacted by the beginning of 2018.
Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable, and the tax
effects of the 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. (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.)
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