Part 2: Carryback and Carryforward

The pretax financial income (or loss) figures for Bryan Clark Company are as follows.

2016	$ 88,000
2017	137,500
2018	44,000
2019	(88,000)
2020	(191,900)
2021	66,000
2022	55,000

Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2016 and 2017 and a 25% tax rate for the remaining years.

Prepare the journal entries for the years 20152019 to record income tax expense and the effects of the net operating loss carrybacks and carryforwards assuming Bryan Clark Company uses the carryback provision.

• All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)