Carla Vista Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Pretax Income Year (Loss) Tax Rate 2023 $113,000 17% 2024 107,000 17% 2025 (240,000) 19% 2026 309,000 19% The tax rates listed were all enacted by the beginning of 2023. Prepare the journal entries for 2025 and 2026, assuming that based on the weight of available evidence, it is more likely than not that one-fourth of the benefits of the loss carryforward will not be realized. (List all debit entries before credit entries. 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 O for the amounts. Record journal entries in the order presented in the problem.)
Carla Vista Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Pretax Income Year (Loss) Tax Rate 2023 $113,000 17% 2024 107,000 17% 2025 (240,000) 19% 2026 309,000 19% The tax rates listed were all enacted by the beginning of 2023. Prepare the journal entries for 2025 and 2026, assuming that based on the weight of available evidence, it is more likely than not that one-fourth of the benefits of the loss carryforward will not be realized. (List all debit entries before credit entries. 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 O for the amounts. Record journal entries in the order presented in the problem.)
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 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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Carla Vista Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. \table[[,\table[[Pretax Income],[(Loss)]],Tax Rate],[Year,(Loss,17% ***please use the screenshot data ENTRY to answer, thanks!***
Transcribed Image Text:Carla Vista Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes.
Pretax Income
Year
(Loss)
Tax Rate
2023
$113,000
17%
2024
107,000
17%
2025
(240,000)
19%
2026 309,000
19%
The tax rates listed were all enacted by the beginning of 2023.
Prepare the journal entries for 2025 and 2026, assuming that based on the weight of available evidence, it is more likely than not
that one-fourth of the benefits of the loss carryforward will not be realized. (List all debit entries before credit entries. 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 O for the amounts. Record journal entries in the order presented in the problem.)
Date Account Titles and Explanation
2025
No Entry
No Entry
(To record income taxes.)
Income Tax Expense
Allowance to Reduce Deferred Tax Asset to Expected Rea
(To record allowance.)
2026
Income Tax Expense
Income Tax Payable
(To record income taxes.)
Allowance to Reduce Deferred Tax Asset to Expected Realiz
Income Tax Payable
(To adjust allowance.)
Debit
11400
58710
11400
0
Credit
11400
58710
11400
0
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