AC 302 Chapter 19 Problem Question 5

AC 302 Chapter 19 Problem Question 5
Name				Date		
Instructor				Course		
Intermediate Accounting 14th Edition by Kieso Weygandt and Warfield						
Primer on Using Excel in Accounting by Rex A Schildhouse						
						
P19-5 (NOL without Valuation Account) Jennings Inc. reported the following pretax income (loss) and related tax rates during the years 2008-2014..						
						
		Year	Pretax Income (Loss)		Tax Rate	
		2008 	$40,000 		30%	
		2009 	25,000 		30%	
		2010 	50,000 		30%	
		2011 	80,000 		40%	
		2012 	(180,000)		45%	
		2013 	70,000 		40%	
		2014 	100,000 		35%	
Pretax financial income (loss) and taxable income (loss) were the same for all years since Jennings began business. The tax rates from 2011-2014 were enacted in 2011.						
						
						
Instructions:						
"(a) Prepare the journal entries for the years 2012-2014 to record income taxes payable (refundable),
     income tax expense (benefit), and the tax effects of the loss carryback and carryforward. Assume
     that Jennings elects the carryback provision where possible and expects to realize the benefits of
     any loss carryforward in the year that immediately follows the loss year."						
						
						
						
						
2010	Account Title				Amount	
	Account Title				Amount	
	Account Title					Amount
						
	Account Title				Amount	
	Account Title					Amount
						
2011	Account Title				Amount	
	Account Title					Amount
	Account Title					Amount
						
2012	Account Title				Amount	
	Account Title					Amount
						
(b) Indicate the effect the 2012 entry(ies) has on the December 31, 2012, balance sheet.						
						
Enter text answer as appropriate.						
						
						
						
						
						
						
						
						
						
						
						
						
						
"(c) Prepare the portion of the income statement, starting with “Operating loss before income taxes,”
     for 2012."						
						
						
	2012 Income Statement					
	Operating loss before income taxes					Amount
	Income tax benefit					
	Title				Amount	
	Title				Amount	Formula
	Title					Formula
						
(d) Prepare the portion of the income statement, starting with “Income before income taxes,” for 2013.						
						
	2013 Income Statement					
	Income before income taxes					Amount
	Income tax expense					
	Title				Amount	
	Title				Amount	Formula
	Net income					Formula
						
	Loss (2012)				Amount	
	Title				Amount	
	Title				Amount	
	Loss carryforward 2013				Formula	
	Title				Amount	
	Taxable income 2013				Formula	
	Title				Percentage	
	Title				Formula