1. NOL Carryforward, Valuation Account Needed (10pts)

Beilman Inc. reports the following pretax income (or loss) for both book and tax purpose.

Year	Pretax Income (Loss)	Tax Rate (%)
2018	$120,000	20
2019	90,000	20
2020	(280,000)	25
2021	120,000	25

The Tax rates listed were all enacted by the beginning of 2018.

Instructions

1. Prepare journal entries for years 2018 to 2021 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized.
2. Prepare the income tax section of 2020 income statement beginning with the line Operating loss before income taxes.