Question
Jennings Inc. reported the following pretax income (loss) and related tax rates during the years 2024-2027. Pretax financial income floss) and taxable income (loss) were
Jennings Inc. reported the following pretax income (loss) and related tax rates during the years 2024-2027. Pretax financial income floss) and taxable income (loss) were the same for all years since Jennings began business. The tax rates from 2024-2027 were enacted in 2024. Instructions 3. Prepare the journal entries for the years 2025-2027 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryback and carryforward. Assume that Jennings elects the carryback provision where possible and expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year. b. Indicate the effect the 2025 entry(ies) has on the December 31, 2025, balance sheet. c. Prepare the portion of the income statement, starting with "Operating loss before income taxes," for 2025. d. Prepare the portion of the incomestatement, starting with "Income before income taxes, "for 2026. NOTE: Enter a formula, a cell reference, or a value (if you are unable to reference a cell), into the yellow shaded input cells.
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