If you're not an accounting expert, please don't reply. Someone sent me the wrong answer earlier.
has provided you the following information.
Year Taxable income Income tax rate
2014 $390,000 35%
2015 $320,000 37%
2016 $400,000 40%
2017 ($1,200,000) 40%
Colorado Company has decided to use the loss carryback and
carryforward provision as a result of the year 2017 loss. The enacted tax rate
remains at 40% after year 2017. Colorado Company has determined that a
valuation allowance is not necessary.
Prepare the journal entry on December 31, 2017 to record the
carryback and carryforward decision.
Part B (30 points)
The Matrix Company began operations as of the beginningof
2015. During 2015, Matrix reported GAAP
(book) income before taxes of $789,500. For income tax purposes, depreciation
expense was $150,000; for GAAP (book) purposes, depreciation expense was
$74,000. Matrix accrued $900,000 of revenue for GAAP (book) purposes during
2015; $600,000 of the accrued revenue was taxable during 2015. Matrix earned
interest of $79,800 from a municipal bond investment during 2015. Matrix’s
marginal income tax rate is 40%. Matrix did not make any income tax payments
Matrix’s taxable income for the year ended December 31, 2015.
Prepare the 2015 year-end journal entry to record
income tax expense.