5. (15 pts) Below are the reported profits and losses of Amherst Company for the past several years along with their tax rates on income reported. Income Tax rate 2014 $100,000 35% 2015 $ 20,000 40% 2016 $100,000 35% 2017 $(250,000) 35% 2018 $85,000 21% 2019 unknown 21%

Amherst elects to use both carry back and carry forward procedures with no valuation allowance and strongly anticipates future profits to recover losses.

1. Record the tax effect of the above in 2017.
2. Show the income tax section and loss section of the income statement for 2017.
3. Record the tax effect of the above in 2018.