Problem: The financial statements of Ecolastico, Inc. reflected the following pretax information for the first four years of operations
2012 2013 2014 2015
Revenues 125,000 155,000 180,000 250,000
expenses 120,000 195,000 160,000 200,000
5,000 (40,000) 20,000 50,000
Income Tax rate 30% for 2012 and 2013 and 40% in 2014 and 2015
Give entries to record Operation carryback, assuming a 50% valuation allowance is needed for any deferred tax asset.