Pretax income and related tax rates during the years

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Reference no: EM131255215

Austin Inc. reported the following pretax income (loss) and related tax rates during the years 2011–2017.

Year Pretax Income (Loss) Tax Rate

2011 $60,000 40%

2012 $45,000 40%

2013 $10,000 30%

2014 $(140,000) 30%

2015 $30,000 30%

2016 $60,000 30%

2017 $40,000 35%

Pretax financial income (loss) and taxable income (loss) were the same for all years since Austin began business.

The tax rates from 2013–2017 were enacted in 2013.

INSTRUCTIONS: Prepare the journal entries for the years 2014-2016 to record income taxes payable (refundable), income tax expense (benefit), and the effects of the loss carryback and carryforward. Assume loss carryforward in the year immediately follows the loss.

Reference no: EM131255215

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