Prepare year-end journal entries for income tax

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Question: 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: 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: EM132768171

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