MAC, Inc, Completed Its First Year of Operations with a Pretax

question 47

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. 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. Prepare the journal entries to record the deferred tax provision and the valuation allowance.

---

Definitions:

Family Therapy

Therapy that treats the family as a system. Views an individual’s unwanted behaviors as influenced by, or directed at, other family members.

Cognitive Therapy

A form of psychotherapy that focuses on changing negative patterns of thinking to improve emotional well-being and adjust behavior.

Psychotherapists

Professionals who treat mental health problems and human distress through psychological techniques and therapies rather than medical means.

Personal Values

The principles and beliefs that an individual considers important and guides their behavior.