XYZ Company reported the following pretax income (loss) and related tax rates during the years 2016-2021.YearPretax Income (loss)Tax rate2016$75,00030%2017150,00030%2018240,00040%2019(540,000)48%2020210,00040%2021300,00042%Prepare the journal entries for the years 2019 and 2020 to record income taxes and the tax effects of the loss. Assume that XYZ elects the carryback provision where possible and it is probable that it will realize benefits of any loss carryforward.Prepare the portion of the income statement that presents your answer in part (a) for the year ended 2019.

Compute the tax refund for 2017 and 2018 and deferred tax assets as follows: The journal entry…

Answered: XYZ Company reported the following…

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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XYZ Company reported the following pretax income (loss) and related tax rates during the years 2016-2021.

Year	Pretax Income (loss)	Tax rate
2016	$75,000	30%
2017	150,000	30%
2018	240,000	40%
2019	(540,000)	48%
2020	210,000	40%
2021	300,000	42%

Prepare the journal entries for the years 2019 and 2020 to record income taxes and the tax effects of the loss. Assume that XYZ elects the carryback provision where possible and it is probable that it will realize benefits of any loss carryforward.
Prepare the portion of the income statement that presents your answer in part (a) for the year ended 2019.

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