Colavecchia Ltd. had a taxable loss of $2,150,000 in 20X8. The tax rate in 20X8 is 40%. In the past three years, the company had the following taxable income and tax rates:

	20X5			20X6			20X7
Taxable income	$	550,000		$	430,000		$	340,000
Tax rate		36	%		38	%		40	%

There are no temporary differences other than those created by income tax losses. The loss was triggered by a downturn in the economy.

Required: 1. What is the amount of refund that will be claimed in 20X8?

2. What is the amount of the loss carryforward?

3. Assuming that loss carryforward usage is probable, prepare a journal entry for income tax in 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

• Record the entry in loss year 20X8 when the provision is meT

4. Assuming that loss carryforward usage is not probable, prepare a journal entry for income tax in 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

• Record the entry in loss year 20X8 when the provision is not met.