Question

Wildhorse Corporation has pretax financial income (or loss) from 2015 through 2021 as follows.

Answer 1

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