In the industry, people perform work that benefits other people. select the best answer choice. a.enterprise b.sales c.service-providing d.goods-providing

Solution :

It is given in the question that :

The pretax loss = $ 585,000

Net operating loss showed by the tax return = $ 746,000

Excess tax depreciation over the book depreciation = $161,000

Current tax expense = 0%

∴Tax rate = 34%

So the journal entry to record the deferred tax consequences of the evaluation allowances are provided below :

Particulars                                                                     Debit           Credit

Deferred tax benefit ((746,000 - 161,000) x 34%)       $198,900

Valuation allowance                                                                        $198,900