MAC,IncCompleted Its First Year of Operations with a Pretax Loss

question 32

Essay

MAC,Inc.completed its first year of operations with a pretax loss of $300,000.The tax return showed a net operating loss of $500,000,which MAC will carryforward.The $200,000 book-tax difference results from excess tax depreciation over book depreciation.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:

PepsiCo

A global food and beverage leader with a product portfolio including 22 brands that generate more than $1 billion each in annual retail sales.

Friend Finder

A feature or service, often found on social platforms or applications, that helps users locate and connect with friends or people with shared interests.

Drone

An unmanned aerial vehicle (UAV) that can be remotely controlled or fly autonomously through software-controlled flight plans in its embedded systems.

Social Media Content

This refers to the text, images, videos, and other multimedia that are created and shared through social media platforms to engage users.