A17-20 Loss Carryback/Carryforward; Temporary Differences; Rate Change (LO 17-2, 17-3, 17-4, 17-6)On 1 January 20X4, Dart Incorporated commenced business operations. The following information is available to you:20X4$90,000Earnings (loss) before taxTax rate (enacted in each year)Depreciation (original cost of assets, $1,000,000)Capital cost allowanceRental revenue recognized*View transaction listJournal entry worksheet1234536%50,00060,00060,0006*There is a rent receivable account at the end of 20X4, because rent revenue was earned in 20X4 but will not be collected until 20X6.This amount is not part of taxable incon In 20X4, but will be taxable income in 20X6 when it is collected.20X5$(410,000)Required:Prepare Journal entries to record tax for 20X4, 20X5, 20X6, and 20X7. Assume that the tax loss carryforward usage in 20X5 isconsidered to be not probable but that in 20X6 the balance of probability shifts and in 20X6 the loss usage is considered to beprobable. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.)Record entry for set-off of current income tax expense payable against losscarryforward.36%50,000020X6$100,00032%50,000120,00020X7$120,00030%50,000110,0004

Deferred tax asset: The deferred tax asset is created when the taxes to be paid as per income tax…

On 1 January 20X4, Dart Incorporated commenced business operations. The following information is available to you: Earnings (loss) before tax Tax rate (enacted in each year) Depreciation (original cost of assets, $1,000,000) Capital cost allowance Rental revenue recognized* 20X4 $90,000 36% 50,000 60,000 60,000 20X5 $(410,000) 36% 50,000 0 20X6 $100,000 32% 50,000 120,000 20X7 $120,000 30% 50,000 110,000

On 1 January 20X4, Dart Incorporated commenced business operations. The following information is available to you: Earnings (loss) before tax Tax rate (enacted in each year) Depreciation (original cost of assets, $1,000,000) Capital cost allowance Rental revenue recognized* 20X4 $90,000 36% 50,000 60,000 60,000 20X5 $(410,000) 36% 50,000 0 20X6 $100,000 32% 50,000 120,000 20X7 $120,000 30% 50,000 110,000

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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The CFO has asked you to calculate the taxable income and prepare journal entries for Rudolf Ltd at 30th June 2022. Accounting loss before tax Impairement loss warranty expense Fines expense Doubtful Debts. Depreciation Plant warranty paid** Depreciation for tax - Plant.** Bad debts written off. ** (80,000) 1,000 10,000 5,000 4,000 20,000 8,000 30,000 10,000 Note These items ** are deductible for tax purposes