(Two NOLs, No Temporary Differences, No Valuation Account, Entries and Income Statement)

Felicia Rashad Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 1999 through 2007 as follows.

Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. Assume the carryback provision is employed for net operating losses. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized.
Instructions

(a) What entry(ies) for income taxes should be recorded for 2003?

(b) Indicate what the income tax expense portion of the income statement for 2003 should look like.
Assume all income (loss) relates to continuing operations.

(c) What entry for income taxes should be recorded in 2004?

(d) How should the income tax expense section of the income statement for 2004 appear?

(e) What entry for income taxes should be recorded in 2007?

(f) How should the income tax expense section of the income statement for 2007 appear?

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Income (Loss) Tax Rate 1999 $29,000 30% 2000 40,000 30% 2001 17,000 35% 2002 48,000 50% 2003 (150,000) 40% 2004 90,000 40% 2005 30,000 40% 2006 105,000 40% 2007 (60,000) 45%