Sarasota Inc. 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.) Pretax Income (Loss) Year 2015 2016 2017 2018 Tax Rate 34 % 34 % 38 % 38 % $108,000 81,000 (265,000) 229,000 The tax rates listed were all enacted by the beginning of 2015 Prepare the journal entries for the years 2015-2018 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryback and carryforward assuming that at the end of 2017 the benefits of the loss carryforward are judged more likely than not to be realized in the future. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 2015 2016 2017 2018 Assuming that at the end of 2017 the benefits of the loss carryforward are judged more likely than not to be realized in the future, prepare the income tax section of the 2017 income statement, beginning with the line "Operating loss before income taxes." (Enter loss using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Sarasota Inc. Income Statement (Partial) Operating Loss before Income Taxes Prepare the journal entries for 2017 and 2018, assuming that based on the weight of available evidence, it is more likely than not that one-fourth of the benefits of the loss carryforward will not be realized. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation 2017 Debit Credit (To record refund.) (To record allowance.) 2018 (To record income taxes.) (To adjust allowance.) Assuming that based on the weight of available evidence, it is more likely than not that one-fourth of the benefits of the loss carryforward will not be realized, prepare the income tax section of the 2017 income statement, beginning with the line "Operating loss before income taxes." (Enter loss using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45). Sarasota Inc. Income Statement (Partial) | Operating Loss before Income Taxes # 1 Click if you would like to Show Work for this question: Open Show Work