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Make the related journal entry required to be made

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Reference no: EM132966982

Sports Academy Inc. follows IFRS and reported the following taxable incomes/losses and tax rates for the first five years ended December 31:

General Information

2016: Taxable income (loss) = $50,000 Tax rate = 25%
2017: Taxable income (loss) = (400,000) Tax rate = 40%
2018: Taxable income (loss) = $100,000 Tax rate = 34%
2019: Taxable income (loss) = $230,000 Tax rate = 34%
2020: Taxable income (loss) = $620,000 Tax rate = 42%

  • Spots Academy Inc. had decided to always first carryback losses in any given year before carrying them forward. All tax rate changes were enacted as of the beginning of the year and these rates were not known until the year of change.

Required:

Problem 1) For the loss of 2017 that is carried forward, prepare the related journal entry/entries required to be made in 2018, 2019 and 2020.

Reference no: EM132966982

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