I submitted this assignment and was told I have incorrect entries Part A/Income tax and deferred and Part B. Can someone help me determine where I went wrong?

Colorado Company has provided you the following information.

YearTaxable incomeIncome tax rate

2014$390,00035%$136,500

2015$320,00037%$118,400

2016$400,00040%$160,000

2017($1,200,000)40%____

Colorado Company has decided to use the loss carryback and carryforward provision as a result of the year 2017 loss. The enacted tax rate remains at 40% after year 2017. Colorado Company has determined that a valuation allowance is not necessary.

Prepare the journal entry on December 31, 2017 to record the carryback and carryforward decision.

My Answer

$320,000 + $400,000 = $720,000 ($720,000 x 40%) = $288,000

Income Tax Refund Receivable

DR $288,000

Income Tax Expense (Carryback Benefit)

CR $288,000

($1,200,000 - $320,000- $400,000 = $480,000)$192,000 = ($480,000 x 40%)

Deferred Tax Asset

DR $192,000

Income Tax Expense (Carryforward Benefit)

CR $192,000

Income lost before tax$(1,200,000)

Income tax benefit ($288,000 due to

operating loss carryback and $192,000

due to operating loss carryforward)$480,000

$(720,000)

$1,200,000 x 40% = $480,000

Deferred Tax Asset

DR $480,000

Income Tax Expense (carryforward benefit)

CR $480,000

Part B (30 points)

The Matrix Company began operations as of the beginning of 2015. During 2015, Matrix reported GAAP (book) income before taxes of $789,500. For income tax purposes, depreciation expense was $150,000; for GAAP (book) purposes, depreciation expense was $74,000. Matrix accrued $900,000 of revenue for GAAP (book) purposes during 2015; $600,000 of the accrued revenue was taxable during 2015. Matrix earned interest of $79,800 from a municipal bond investment during 2015. Matrix's marginal income tax rate is 40%. Matrix did not make any income tax payments during 2015.

1. Determine Matrix's taxable income for the year ended December 31, 2015.

Income before tax$789,500

Depreciation Expense+ $74,000

$863,500

-$150,000

$713,500 Taxable Income Year End Dec 31, 2015.

B.

1. Prepare the 2015 year-end journal entry to record income tax expense.

Income before taxes $789,500 x 40% = $315,800

Taxable Income $713,500 x 40% = $285,400

Depreciation Expense $150,000 - $74,000 = $76,000

$76,000 x 40% = $30,400

Dec 31, 2015

Income Tax Provision

DR $315,800

Deferred Tax Liability

CR $285,400

Income Tax Payable

CR $30,400