CPS Corporation reported a pretax operating loss of $600,000 for financial reporting purposes in 2021.
The enacted tax rate is 30%. There were no temporary differences at the beginning of the year and none
originating in 2021.
CPS anticipated that it is more likely than not that half of the deferred tax asset will ultimately be realized.
a. Prepare a journal entry (or entries) to record CPS Companys tax provision for the year 2021.
b. Prepare the lower portion of CPS 2021 income statement.
c. Compute the net realizable value of the deferred tax asset at the end of 2021.
d. CPS Corporation reported a pretax operating income of $80,000 for financial reporting purposes in 2022.
The enacted tax rate is 30%. There were no temporary differences at the beginning of the year and none
originating in 2022.
At the end of 2022, CPS anticipated that it is more likely than not that $100,00 of the deferred tax asset
will ultimately be not realized.
Prepare a journal entry (or entries) to record CPS Companys tax provision for the year 2022.
Solve and show all work pls
