Q2. Public Wares Corporation reports the following pretax income (loss) for both financial reporting purposes and tax purposes. (Assume the carryback provision is used for a net operating loss and 2009 is the companys first year of operations.) Tax rate is 40% for all the years. Year Pretax Income (Loss) 2009 $230,000 2010 (335,000) 2011 50,000 Instructions (a) Prepare the journal entries for the year 2010 to record the tax effects of the loss carryback and carryforward, assuming that the benefits of any loss carryforwards are judged more likely than not to be realized in the future. (b) Prepare the income tax section of the 2010 income statement beginning with the line Operating loss before income taxes.