Casper Ltd incurred a loss of $500,000 for tax purposes in 2002. This was due to one-off circumstances and it is expected that Casper will make profits again in 2003 and subsequent years. There are no temporary differences in either year. In 2003 Casper makes a profit of $700,000. The tax rate is 30 per cent. What are the journal entries for 2002 and 2003?
E) None of the given answers.

Question

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The Answer of Casper Ltd incurred a loss of $500,000 for tax purposes in 2002. This was due to one-off circumstances and it is expected that Casper will make profits again in 2003 and subsequent years. There are no temporary differences in either year. In 2003 Casper makes a profit of $700,000. The tax rate is 30 per cent. What are the journal entries for 2002 and 2003?
E) None of the given answers.

Casper Ltd Incurred a Loss of $500,000 for Tax Purposes