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At the end of 2016, Keil Company reports a pretax operating loss of $80,000 for both financial reporting and income tax purposes. Prior to 2016, Keil had been successful and had reported and paid taxes on the following pretax financial income and taxable income: 2013, $37,200; 2014, $51,900; and 2015, $53,800. Keil had been subject to tax rates of 20% in 2013, 25% in 2014, and 30% in 2015. Required: 1. Prepare Keil's income tax journal entry at the end of 2016. 2. Prepare the lower portion of Keil's 2016 income statement.

At the end of 2016, Keil Company reports a pretax operating loss of $80,000 for both financial reporting and income tax purposes. Prior to 2016, Keil had been successful and had reported and paid taxes on the following pretax financial income and taxable income: 2013, $37,200; 2014, $51,900; and 2015, $53,800. Keil had been subject to tax rates of 20% in 2013, 25% in 2014, and 30% in 2015. Required: 1. Prepare Keil's income tax journal entry at the end of 2016. 2. Prepare the lower portion of Keil's 2016 income statement.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of 2016, Keil Company reports a pretax operating loss of $80,000 for both financial reporting and income tax purposes. Prior to 2016, Keil had been successful and had reported and paid taxes on the following pretax financial income and taxable income: 2013, $37,200; 2014, $51,900; and 2015, $53,800. Keil had been subject to tax rates of 20% in 2013, 25% in 2014, and 30% in 2015. Required: 1. Prepare Keil's income tax journal entry at the end of 2016. 2. Prepare the lower portion of Keil's 2016 income statement.
Transcribed Image Text:At the end of 2016, Keil Company reports a pretax operating loss of $80,000 for both financial reporting and income tax purposes. Prior to 2016, Keil had been successful and had reported and paid taxes on the following pretax financial income and taxable income: 2013, $37,200; 2014, $51,900; and 2015, $53,800. Keil had been subject to tax rates of 20% in 2013, 25% in 2014, and 30% in 2015. Required: 1. Prepare Keil's income tax journal entry at the end of 2016. 2. Prepare the lower portion of Keil's 2016 income statement.
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