Halton Corp. reported pre-tax earnings from operations in 20X7 of $120,000 (the first year of operations). In 20X8, the corporation experienced a $70,000 pre-tax loss from operations. Future operations are highly uncertain. Assume an income tax rate of 40%. The company has no temporary differences. Required: 1. Assess Halton's income tax situation for 20X7 and 20X8. How should Halton elect to handle the loss in 20X8? 2. Based on your assessments in requirement 1, give the 20X7 and 20X8 income tax entries. 3. Show how all tax-related items would be reported on the 20X7 and 20X8 statement of comprehensive income and statement of financial position.