Lafayette,Inc

question 43

Essay

Lafayette,Inc.completed its first year of operations with a pretax loss of $800,000.The tax return showed a net operating loss of $750,000,which the company will carryforward.The $50,000 book-tax difference results from a disallowed deduction for meals and entertainment.Management has determined that they should record a valuation allowance equal to the net deferred tax asset.Assuming a tax rate of 34%,prepare the journal entries to record the deferred tax provision and the valuation allowance.

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Definitions:

Suspension

The state of being hung or supported from above, or a system of springs and shock absorbers in a vehicle that cushions and absorbs road shocks.

Per Dose

Referring to the specified amount of medication or substance to be taken or administered each time, as part of a treatment regimen.

Intravenous Setup

Equipment and procedure used for administering fluids, medications, or nutrients directly into a vein.

Infusion Clamp

A device used to control the flow rate of intravenous fluids during an infusion.