Question Felicia Rashad Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2006 through 2014 as follows.

Income (Loss) Tax Rate

2006 $29,000 30 %

2007 40,000 30 %

2008 17,000 35 %

2009 48,000 50 %

2010 (150,000 ) 40 %

2011 90,000 40 %

2012 30,000 40 %

2013 105,000 40 %

2014 (60,000) 45 %

Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. Assume the carryback provision is employed for net operating losses. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized.

a) What entries for income taxes should be recorded for 2010? .

b) Indicate what the income tax expense portion of the income statement for 2010 should look like. Assume all income (loss) relates to continuing operations.

c)What entry for income taxes should be recorded in 2011?

d) How should the income tax expense section of the income statement for 2011 appear?

e) what entry for income taxes should be recorded in 2014

f) how should the income tax expense section of the statement for 2104 appear to be ?

?

A. Dr Deferred Tax Asset60,000.00

Cr Deferred Tax 60,000.00

B. Income Statement (Partial)

Current Tax -

Deferred Tax(60,000.00)

Total Tax(60,000.00)

C.Dr Deferred Tax Asset 36,000

Cr Deferred Tax 36,000

D. Income Statement (Partial)

Current Tax -

Deferred Tax 36,000

Total Tax 36,000

E. Dr Deferred Tax Asset 27,000

Cr Deferred Tax 27,000

F. Income Statement (Partial)

Current Tax -

Deferred Tax 27,000

Total Tax 27,000

Explanation:

A. Calculation for what the entries for income taxes should be recorded for 2010

Entries for Income tax for 2010

Dr Deferred Tax Asset60,000.00

Cr Deferred Tax 60,000.00

2010 (150,000 *40 %)

(To record timing difference of carry forward losses)

b) Indication for what the income tax expense portion of the income statement for 2010 should look like. :

Felicia Rashad Corporation

Income Statement (Partial)

Current Tax -

Deferred Tax(60,000.00)

Total Tax(60,000.00)

c) Calculation for what the entries for income taxes should be recorded for 2011

Dr Deferred Tax Asset 36,000

Cr Deferred Tax 36,000

2011 (90,000* 40 %)

(To record deferred tax asset utilization)

d) Income tax expense section of the income statement for 2011 appear

Felicia Rashad Corporation

Income Statement (Partial)

Current Tax -

Deferred Tax 36,000

Total Tax 36,000

e) Calculation for what the entries for income taxes should be recorded for 2014

Dr Deferred Tax Asset 27,000

Cr Deferred Tax 27,000

2014 (60,000*45 %)

(To record deferred tax asset utilization)

f) Income tax expense section of the income statement for 2014 appear

Felicia Rashad Corporation

Income Statement (Partial)

Current Tax -

Deferred Tax 27,000

Total Tax 27,000

answer: d. characteristics of guests

explanation: it is directly related to the spending characteristics of attendees who fall into each of these categories:

a and c

explanation: