Impact of Tax Items Indicate the impact on net income - increase (I), decrease (D), no effect (N) - of the overall journal entry for each of the following transactions. 1. recording only a tax carryback in the year of an operating loss 2. recording a tax carryback and carryforward in the year of an operating loss 3. change in tax rate from 40% to 35% to change a deferred tax asset on its books 4. change in tax rate from 35% to 40% to change a deferred tax liability on its books