Bramble Inc. reported the following pretax income (loss) andrelated tax rates during the years 2019–2022. Pretax Income (loss)Tax Rate 2019 $84,800 40 % 2020 (190,800) 40 % 2021 212,000 20 %2022 106,000 20 % Pretax financial income (loss) and taxable income(loss) were the same for all years since Bramble began business.The tax rates from 2019–2022 were enacted in 2019.
Prepare the journal entries for the years 2020–2022 to recordincome taxes payable (refundable), income tax expense (benefit),and the tax effects of the loss carryforward. Assume that Brambleexpects to realize the benefits of any loss carryforward in theyear that immediately follows the loss year.
Prepare the portion of the income statement, starting with“Operating loss before income taxes,” for 2020.
Prepare the portion of the income statement, starting with“Income before income taxes,” for 2021.
