Prepare year-end journal entries for income tax

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Reference no: EM132704086

ITA Beverages Inc. has a policy of carrying back tax losses before carrying any remaining amounts forward. ITA Beverages reported the following pre-tax accounting incomes (losses) for a period of 6 years:

Year                                2019                 2020              2021               2022            2023             2024

Accounting Income (Loss)   $-              $ 125,242       $ 55,663    $ (198,797)   $ 169,692   $ (426,071)
Tax Rate                       27%                 27%               27%           28%             28%              28%

Note that income (loss) for tax purposes is the same as accounting income (loss) for all years. The income tax rate is not expected to change following the 2024 year.

Required:

Problem 1: Prepare year-end journal entries for income tax for 2020 to 2024. Assume that ITA Beverages follows IFRS, and has a year end of May 31. Any loss carryforward benefits are judged more likely than not to be realized in future years.

Reference no: EM132704086

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