Topper Company reported the following pretax financial income (loss) for the years 2018 through 2022:

2018 $70,000

2019 45,000

2020 (260,000)

2021 90,000

2022 215,000

Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 30% for all the years.

Instructions

(a) Prepare the journal entries for the years 2018 through 2022 to record income tax expense, income tax payable (refundable).

(b) Prepare the income tax section of the 2020 income statement beginning with the line Income (loss) before income taxes.