Part a

Angelini Corporation operates in an industry for which net operating loss (NOL) carrybacks are allowed. In its first two years of operations Angelini reported the following operating income (loss) amounts:

2019	$	1,250,000
2020		(2,875,000	)

Angelini has no book vs. tax differences in either year. The enacted income tax rate is 30% for all years. Angelini believes its financial losses in 2020 were attributable to the Coronavirus pandemic and that the company will return to profitability in 2021 and beyond.

Required

1. Assume that Angelini elects the carryback option.

   1. Show the entry/entries Angelini should book in 2020 to account for its NOL.

   2. Show the entry/entries Angelini should book in 2021 if it has taxable income of $4,000,000 for that year.

2. Assume instead that Angelini opts to NOT carryback its NOLs.

   1. Show the entry/entries Angelini should book in 2020 to account for its NOL.

   2. Show the entry/entries Angelini should book in 2021 if it has taxable income of $4,000,000 for that year.