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What would the required journal entries be

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Question - In the first year of operations, 2016, ABC Ltd. reports a taxable income of $50,000 and paid income taxes at a rate of 18%. It is now the end of 2017, and ABC Ltd. has a loss of $100,000 for tax purposes. ABC's management believes it is now likely the company will be able to use up its tax losses as sales and profits are now increasing rapidly. The tax rate is currently 20% in 2017, but this tax rate expected to increase to 24% starting in 2018 and onwards. Assume that due to expanding so quickly that ABC is currently facing an extreme short-term cash crunch. What would the required journal entries be for the above information?

Reference no: EM132916510

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