Decker Corporation experienced a loss in 2020. Additional information for Decker Corporation follows.
| 2020 | |
|---|---|
| Taxable income (loss) | $(130,000) |
| Income tax rate | 25% |
There were no temporary differences from 2018 to 2020 other than any related to a net operating loss carryforward.
a. Record income taxes for 2020 and 2021 assuming the following.
Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.
| Date | Account Name | Dr. | Cr. |
|---|---|---|---|
| Dec. 31, 2020 | AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer |
| AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer |
| Date | Account Name | Dr. | Cr. |
|---|---|---|---|
| Dec. 31, 2021 | AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer |
| AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer | |
| AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer | |
| AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer |
b. List the amounts that should be reported on the income statements and balance sheets for 2020 and 2021.
Note: Use a negative sign to indicate a loss.
| Income statement | 2020 |
|---|---|
| Loss before tax | Answer |
| Income tax benefit | Answer |
| Net income (loss) | Answer |
Note: Do not use negative signs with your answers.
| Income statement | 2021 |
|---|---|
| Income before tax | Answer |
| Income tax expense | Answer |
| Net income (loss) | Answer |
| Balance Sheet, Dec. 31 | 2020 | 2021 |
|---|---|---|
| Noncurrent assets | ||
| AnswerDeferred Tax AssetValuation Allowance for Deferred Tax Asset Income Tax Payable Liability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer |
| Current liabilities | ||
| AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer |
| Noncurrent liabilities | ||
| AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer |
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