Poper Icexperienced its first fiscal Net Loss in its five year history. The TSI Management Team has hired you to help them with some questions they have on how to handle the Net Loss.

TSI Accounting Net Income (Loss) from 2013 to 2017 are as follows:

Year Accounting (Loss) Tax Rate 2013 70,000 25% 2014 25,000 25% 2015 60,000 25% 2016 80,000 30% 2017 (210,000) 35%

Accounting Income (Loss) and Taxable Income (Loss) were the same for all years. TSI follows IFRS and its Management Team expects the Net Loss in 2017 to be a one-time thing.

TSIs Management Team is not sure if they should carry-back or carry-forward the loss. They have asked you to answer the following questions:

1. If they were to maximize the carry-back provision where possible what would the journal entry be; how would this be reflected on its Income Statement (being from Loss before Income Tax); indicate specifically where, if at all, would there be an effect on the Balance Sheet (Statement of Financial Position) and any associated Notes or Disclosures?

2. If they were to only carry-forward the loss what would the journal entry be; how would this be reflected on its Income Statement (being from Loss before Income Tax); indicate specifically where, if at all, would there be an effect on the Balance Sheet (Statement of Financial Position) and any associated Notes of Disclosures?

3. How would your answer to (1) change if TSIs Management Team were not confident that future taxable incomes were probable?

4. In your opinion, should TSI maximize the carry-back provision where possible or simply carry-forward the loss for future Net Incomes? It is expected that you have at least three valid reasons for your decision.