Carly Inc. reported the following accounting income (loss) and related tax rates during the years 2009 to 2015:

Accounting income (loss) and taxable income (loss) were the same for all years since Carly began business. The tax rates from 2012 to 2015 were enacted in 2012.
Instructions
(a) Prepare the journal entries to record income taxes for the years 2013 to 2015. Assume that Carly uses the carryback provision where possible and expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year.
(b) Indicate the effect of the 2013 entry (ies) on the December 31, 2013 statement of financial position if Carly follows the ASPE future/deferred income taxes method. Indicate as well the effect on the statement of financial position if Carly reports under IFRS.
(c) Show how the bottom portion of the income statement would be reported in 2013, beginning with "Loss before income tax."
(d) Show how the bottom portion of the income statement would be reported in 2014, starting with "Income before income tax."
(e) Prepare the journal entries for the years 2013 to 2015 to record income taxes, assuming that Carly uses the carryback provision where possible but is uncertain if it will realize the benefits of any loss carryforward in the future. Carly does not use a valuation allowance.
(f) Assume now that Carly uses a valuation allowance account along with its deferred tax asset account. Identify which entries in part (e) would differ and prepare them.
(g) Based on your entries in part (e), indicate how the bottom portion of the income statements for 2013 and 2014 would be reported, beginning with "Income (loss) before income tax."
(h) From a cash flow perspective, can you think of any advantage in using the valuation allowance for financial reporting purposes? Can you think of any advantages in not using it?

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Tax Rate 20% 20% 20% 30% 35% 30% 25% Year Accounting Income (Loss) 2009 2010 2011 2012 2013 2014 2015 $ 70,000 25,000 60,000 80,000 (210,000) 70,000 90,000