Exercise 19-24 (Part Level Submission)

Blue Inc. reports the following pretax income (loss) for both book and tax purposes. (Assume the carryback provision is used where possible for a net operating loss.)

Year		Pretax Income (Loss)			Tax Rate
2015		$130,000			40	%
2016		94,000			40	%
2017		(307,000	)		45	%
2018		112,000			45	%

The tax rates listed were all enacted by the beginning of 2015.

(a)

Prepare the journal entries for years 20152018 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryback and loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized. (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.)

Date	Account Titles and Explanation	Debit	Credit
2015
2016
2017
	(To record refund.)
	(To record allowance.)
2018
	(To record income taxes.)
	(To adjust allowance.)