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E19-23B (NOL Carryback and Carryforward, Valuation Account versus No Valuation Account)Public Wares Corporation reports the following pretax income (loss) for both financial reporting purposes and tax purposes. (Assume the carryback provision is used for

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E19-23B (NOL Carryback and Carryforward, Valuation Account versus No Valuation Account)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 2013 is the company?s first year of operations.);Year Pretax Income (Loss) Tax Rate;2013 $230,000 40%;2014 (335,000) 40%;2015 (50,000) 35%;2016 265,000 30%;The tax rates listed were all enacted by the beginning of 2013.;Instructions;(a) Prepare the journal entries for the years 2013 through 2016 to record income tax expense (benefit) and income tax payable (refundable) and 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 2014 income statement beginning with the line ?Operating loss before income taxes.?;(c) Prepare the income tax section of the 2015 income statement beginning with the line ?Operating loss before income taxes.?

 

Paper#75289 | Written in 18-Jul-2015

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