10 points Loss carryforward: Creaky Corporation began operations on January 1, 20A, and reports the following taxable income (loss) amounts.

Year	Taxable Income (Loss)	Tax Rate (%)	Tax Paid
20A	120,000	30	36,000
20B	(600,000)	25	__ _-------
20C	190,000	25	-------

Creaky has no other temporary or permanent differences between tax and book

income. Creaky feels that 20B was highly unusual and expects to report taxable

income in future years (any loss carryforward will be realized in full in the

near future). The enacted tax rate is 25% beginning in 20B.

Required:

What entry(ies) is recorded in 20B to recognize any benefits related to the loss?

Please compute and show the reported net loss for 20B, and the entry recorded for

taxes for 20C (recognizing the 80% limitation in the tax law).