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Operating income and tux rates for Free Company's first three years of operations were as follows:
Income Enacted tax rate
2020 $400,000 25%
2021 ($1,000,000) 20%
2022 $1,680,000 30%
Answer the following questions.... There are four parts...a, b, c, d,
- Prepare the income tax journal entry for 2020
- Prepare the 2021 journal entry(ies) for income tax expense assuming that the company chooses to
Carryforward their operating loss. They also determine that it is more likely than not that they will only
Realize 50% of their deferred taxed asset.
- Prepare the section of the Income Statement for the end of 2021 starting with Income before Taxes
- Prepare the Income Tax journal entry(ies) for 2022
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