Reference no: EM132467662

Flounder Inc. reports the following pretax income (loss) for both book and tax purposes. (Assume the carryback provision is used where possible for a net operating loss.)

Year     PretaxIncome (Loss)                 Tax Rate

2015            $109,000                            40%

2016             84,000                              40%

2017            (303,000)                           45%

2018             132,000                             45%

The tax rates listed were all enacted by the beginning of 2015.

Question 1: Prepare the journal entries for years 2015-2018 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryback and loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)