In 2014, its first year of operations, Kimble Corp. had an $800,000 net operating loss. In 2015, Kimble has $350,000 taxable income. The tax rate for both years is 30%. Required:
a. Give all entries needed in 2014.Assume the management of Kimble Corp. thinks that it is more likely than not that the loss carry forward will not be realized in the near future because it is a new company (this is before results of 2015 operations are known).
b. Give all entries needed in 2015. Assume that at the end of 2015 it is more likely than not that $60,000 of the deferred tax asset will not be realized.