Prepare a net operating loss schedule

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Reference no: EM13751783

Wilson Corp. reported the following pretax financial income (loss) for the years

2011-2015.

2011 $246,600

2012 345,000

2013 130,000

2014 (577,100)

2015 177,100

Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 34% for 2011 and 2012, and 40% for 2013-2015. Assume the carry back provision is used first for net operating losses.

a) Prepare a net operating loss schedule

b) Prepare the journal entries for the years 2013-2015 to record income tax expense, income tax payable (refundable), and the tax effects of the loss carry back and loss carry forward. Record an allowance assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carry forward will not be realized.

c) Prepare the income tax section of the 2014 income statement beginning with the line "Income (loss) before income taxes."

Reference no: EM13751783

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