(NOL Carryback and Carryforward, Valuation Account Needed) Wangerin Company reported the following pretax financial income (loss) for the years 20182022.

2018	$240,000
2019	350,000
2020	120,000
2021	(570,000)
2022	180,000

Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 34% for 2018 and 2019, and 20% for 20202022. Assume the carryback provision is used first for net operating losses.

Instructions

a. Prepare the journal entries for the years 20202022 to record income tax expense, income taxes payable (refundable), and the tax effects of the loss carryback and loss carryforward, assuming no valuation allowance is needed.

b. Prepare the income tax section of the 2021 income statement beginning with the line Income (loss) before income taxes.