Reference no: EM132634655
SUPPLEMENTAL PROBLEM - In its first two years of operations, GraNOLa Corporation reports a net operating loss (NOL) of $500,000 for 2021 and taxable income of $70,000 before any NOL carryforward for 2022. GraNOLa has a 25% tax rate.
As of the end of each year, cumulative temporary differences are:
Cumulative temporary difference at December 31 2021 and 2022, giving rise to future taxable amounts of $230,000 and $240,000, respectively.
Cumulative temporary difference at December 31, 2021 and 2022, giving rise to future deductible amounts of $95,000 and $120,000, respectively.
Assume that, based on the weight of available evidence, it is more likely than not that $100,000 and $64,000 at the end of 2021 and 2022, respectively, of future deductible amounts and loss carryforwards will not be realized.
Required - Prepare GraNOLa Corporation's journal entries for the current and deferred portions of income taxes for 2021 and 2022.
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: Required - Prepare GraNOLa Corporation's journal entries for the current and deferred portions of income taxes for 2021 and 2022
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