Blue Spruce Inc. incurred a net operating loss of $$584,400$ in $2023.$ Combined income for $2020,2021,$ and $2022$ was $$448,000.$ 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.

$($a$)$

Prepare the journal entry that is necessary at the end of $2023$ assuming that Blue Spruce does not use a valuation allowance

account. $($List debit entry before credit entry. 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

$2023$

Income Tax Receivable

Current Tax Benefit$($b$)$

Prepare the journal entries that are necessary at the end of $2023$ assuming that Blue Spruce does use a valuation allowance

account. $($List all debit entries before credit entries. 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

$2023$

$($To recognize benefit of loss carryback$)$

$2023$

$($To recognize benefit of loss carryforward$)$

$2023$

$($To bring the deferred tax asset account to its realizable

value$)$