Problem 19-05 a, c-d

Jennings Inc. reported the following pretax income (loss) and related tax rates during the years 20192022.

		Pretax Income (loss)			Tax Rate
2019		$80,000			40	%
2020		(180,000)			40	%
2021		230,000			20	%
2022		100,000			20	%

Pretax financial income (loss) and taxable income (loss) were the same for all years since Jennings began business. The tax rates from 20192022 were enacted in 2019.

a. Prepare the journal entries for the years 20202022 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryforward. Assume that Jennings expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year.

c. Prepare the portion of the income statement, starting with Operating loss before income taxes, for 2020.

d. Prepare the portion of the income statement, starting with Income before income taxes, for 2021