Jennings Incorporated reported the following pre-tax income or loss and related tax rates during the years 2010 - 2016.
Pre-tax Income (loss) Tax Rate
2010. $40000. 30%
2011. 25000. 30%
2012. 50000. 30%
2013. 80000. 40%
2014. (180000) 45%
2015. 70000. 40%
2016. 100000. 35%
pre-tax Financial income or loss in taxable income or loss or the same for all years since Jennings began business. The tax rate from 2013 to 2016 were enacted in 2013.
(a) prepare the journal entries for the years 2014 to 2016 to record income taxes payable or refundable ,income tax expense or benefit, and the tax effects of the loss carry-back and carry-forward.
assume that Jennings elects the carryback provision where possible and expects to realize the benefits of any loss carry forward in the year that immediately follows the loss year.
2014 two entries to record carry back and two entries to record carry forward
2015 three entries
2016 two entries