Question
The pretax financial income (or loss) figures for Jenny SpanglerCompany are as follows.
|
2009 |
|
$178,800 |
|
|
2010 |
|
263,100 |
|
|
2011 |
|
86,700 |
|
|
2012 |
|
(178,800 |
) |
|
2013 |
|
(400,700 |
) |
|
2014 |
|
131,500 |
|
|
2015 |
|
105,100 |
|
Pretax financial income (or loss) and taxable income (loss) werethe same for all years involved. Assume a 35% tax rate for 2009 and2010 and a 30% tax rate for the remaining years.
Prepare the journal entries for the years 2011 to 2015 to recordincome tax expense and the effects of the net operating losscarrybacks and carryforwards assuming Jenny Spangler Company usesthe carryback provision. All income and losses relate to normaloperations. (In recording the benefits of a loss carryforward,assume that no valuation account is deemed necessary.)
