Question
The pretax financial income (or loss) figures for Tamarisk Company are as follows. 2016 275,000 2017 88,000 2018 (176,000 ) 2019 (115,000 ) 2020 148,000
The pretax financial income (or loss) figures for Tamarisk Company are as follows.
2016 | 275,000 | ||
2017 | 88,000 | ||
2018 | (176,000 | ) | |
2019 | (115,000 | ) | |
2020 | 148,000 | ||
2021 | 108,000 |
Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2016, and a 20% tax rate for the remaining years. Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carrybacks and carryforwards assuming Tamarisk Company uses the carryback provision. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)
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