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Sheffield Inc. incurred a net operating loss of $579,500 in 2020. Combined income for 2017, 2018, and 2019 was $464,100. The tax rate for all years is 30%. Assume that it is more likely than not that the entire tax loss carryforward will not be realized in future years. Assume that Sheffield earns taxable income of $21,200 in 2021 and that at the end of 2021 there is still too much uncertainty to recognize a deferred tax asset.

Prepare the journal entries that are necessary at the end of 2021 assuming that Sheffield does not use a valuation allowance account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Year	Account Titles and Explanation	Debit	Credit
2021	enter an account title to record current tax expense	enter a debit amount	enter a credit amount
	enter an account title to record current tax expense	enter a debit amount	enter a credit amount
	(To record current tax expense)
2021	enter an account title to record current tax benefit	enter a debit amount	enter a credit amount
	enter an account title to record current tax benefit	enter a debit amount	enter a credit amount
	(To record current tax benefit)

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List of Accounts

Prepare the journal entries that are necessary at the end of 2021 assuming that Sheffield does use a valuation allowance account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Year	Account Titles and Explanation	Debit	Credit
2021	enter an account title to record deferred tax expense	enter a debit amount	enter a credit amount
	enter an account title to record deferred tax expense	enter a debit amount	enter a credit amount
	(To record deferred tax expense)
2021	enter an account title to bring the Deferred Tax Asset account to its realizable value	enter a debit amount	enter a credit amount
	enter an account title to bring the Deferred Tax Asset account to its realizable value	enter a debit amount	enter a credit amount
	(To bring the Deferred Tax Asset account to its realizable value)

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