Income tax journal entries of the swelland company

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Reference no: EM13868741

At the end of 2010, its first year of operations, the Swelland Company reported a pretax operating loss of $32,000 for both financial reporting and income tax purposes. At that time the company had no positive verifiable evidence that it would earn future taxable income. However, due to successful management, the company reported pretax operating income (and taxable income) of $70,000 in 2011. During both years, the income tax rate was 30% and no change had been enacted for future years.

Required:
1. Prepare the income tax journal entries of the Swelland Company at the end of 2010.
2. Prepare the income tax journal entry of the Swelland Company at the end of 2011.
3. Prepare the lower portion of Swelland's 2011 income statement.

Reference no: EM13868741

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