Cullumber Corporation has pretax financial income (or loss) from 2015 through 2021 as follows.

		Income (Loss)			Tax Rate
2015		$62,400			25	%
2016		(91,000	)		20	%
2017		117,000			20	%
2018		39,000			20	%
2019		136,500			20	%
2020		(78,000	)		25	%
2021		166,000			25	%

Pretax financial income (loss) and taxable income (loss) were the same for all years since Cullumber has been in business. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized.

(a)

Correct answer iconYour answer is correct.

What entries for income taxes should be recorded for 2016? (Credit account titles are automatically indented when 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.)

Account Titles and Explanation	Debit	Credit

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List of Accounts

Attempts: 2 of 3 used

(b)

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.

Indicate what the income tax expense portion of the income statement for 2016 should look like. Assume all income (loss) relates to continuing operations. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Cullumber Corporation Income Statement (Partial) December 31, 2016For the Year Ended December 31, 2016For the Quarter Ended December 31, 2016
DividendsExpensesBenefit Due to Loss CarrybackBenefit Due to Loss CarryforwardIncome Tax BenefitIncome Tax ExpenseNet Income / (Loss)Operating Loss before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		$
DividendsExpensesIncome Tax BenefitIncome Tax Benefit Due to Loss CarrybackIncome Tax Benefit Due to Loss CarryforwardIncome Tax ExpenseNet Income / (Loss)Operating Loss before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues
CurrentDeferredDividendsExpensesIncome Tax Benefit Due to Loss CarrybackIncome Tax Benefit Due to Loss CarryforwardNet Income / (Loss)Income before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues
DividendsExpensesBenefit Due to Loss CarrybackBenefit Due to Loss CarryforwardIncome Tax BenefitIncome Tax ExpenseNet Income / (Loss)Operating Loss before Income TaxesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		$