|
Income (Loss)
|
|
|
Year
|
Before Tax
|
Tax Rate
|
|
1
|
$60,000
|
|
35%
|
|
2
|
86,000
|
|
40%
|
|
3
|
38,000
|
|
40%
|
|
4
|
(268,000)
|
|
40%
|
|
5
|
45,000
|
|
35%
|
|
6
|
35,000
|
|
35%
|
|
7
|
80,000
|
|
35%
|
|
8
|
(280,000)
|
|
40%
|
|
9
|
15,000
|
|
38%
|
|
10
|
24,000
|
|
38%
|
Tucker Imported? Provisions, Inc. reported pretax accounting income equal to its taxable? income, as presented? above:
All tax changes are enacted into law as of the beginning of the year. All tax rate changes are not known until the year of change.
Tucker elects the carryback/ carryforward option for all net operating losses.
For the losses noted above, management concluded that it is more likely than not that the benefits of the net operating losses will be fully realizable in the future.
Prepare the journal entries necessary to record the tax provisions for years 4 through 8
Begin by preparing the entry, if needed, to record the portion of the year 4 NOL carried back.
prepare a partial incomestatement for years 4 through 8
compute the effective tax rate for yearrs 4 hrough 8