Question - Jeter Inc. has had the following taxable income amounts (equal to pre-tax income) since 2010.
Income (Loss) Tax Rate
2010 $120,000 30%
2011 $300,000 30%
2012 $100,000 35%
2013 ($550,000) 40%
2014 $100,000 40%
For questions a to c, assume that it is more likely than not that any deferred tax asset will be realized.
a. What entry for income taxes should be recorded in 2011?
b. What entry for income taxes should be recorded for 2013?
c. What entry for income taxes should be recorded for 2014?
d. Assuming that it is more likely than not that 50% of the deferred tax asset will not be realized, prepare the journal entries for 2013.