Answer:
Wildhorse Corporation
a. Entry for income taxes for 2015:
Debit Income Taxes Expense $16,320
Credit Taxes Payable $16,320
To record income taxes expense for the year.
b. Income Tax Expense Portion of the Income Statement for 2016:
Income before taxes (Loss) ($95,200)
Income taxes expense $0
Net Income (Loss) ($95,200)
c. Entry for income taxes for 2017:
Debit Income Taxes Expense $5,440
Credit Taxes Payable $5,440
To record income taxes expense for the year.
d. Income Tax Expense Portion of the Income Statement for 2018:
Income before taxes (Loss) $40,800
Income taxes expense 8,160
Net Income (Loss) $32,640
e. Entry for income taxes for 2019:
Debit Income Taxes Expense $28,560
Credit Taxes Payable $28,560
To record income taxes expense for the year.
f. Income Tax Expense Portion of the Income Statement for 2020:
Income before taxes (Loss) (81,600)
Income taxes expense $0
Net Income (Loss) (81,600)
Explanation:
a) Data and Calculations:
Pretax financial income (or loss) from 2015 through 2021 as follows.
Year Income (Loss) Tax Rate Taxable Taxes Net Income
Income Expense (Loss)
2015 $65,280 25% $65,280 $16,320 $48,960
2016 (95,200) 20% $0 $0 (95,200)
2017 122,400 20% $27,200 $5,440 $116,960
2018 40,800 20% $40,800 $8,160 $32,640
2019 142,800 20% $142,800 $28,560 $114,240
2020 (81,600) 25% $0 $0 (81,600)
2021 173,200 25% $91,600 $22,900 $150,300
