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( How should the income tax expense section UI E LUC I E19-23 (203) (NOL Carryback and Carryforward, Valuation Account versus No Valuation Account) Spamela Hamderson Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. (Assume the carryback provision is used for a net operating loss.) Tax Rate 34% Year 2015 2016 2017 2018 Pretax Income (Loss) $120,000 90,000 (280,000) 220,000 38 38 The tax rates listed were all enacted by the beginning of 2015. Instructions (a) Prepare the journal entries for the years 2015-2018 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryback and carryforward, assuming that at the end of 2017 the benefits of the loss carryforward are judged more likely than not to be realized in the future. (b) Using the assumption in (a), prepare the income tax section of the 2017 Income statement beginning with the line "Operating loss before income taxes." (c) Prepare the journal entries for 2017 and 2018, assuming that based on the weight of available evidence, it is more likely than not that one-fourth of the benefits of the loss carryforward will not be realized. (d) Using the assumption in (c), prepare the income tax section of the 2017 income statement beginning with the line "Operating loss before income taxes." LUL LTM Exercise 19-23 Hamderson Corporation Page 1101 2 Please show your work in any calculations 3 This exercise was not on the assignment list but is important to understand Net Operating Loss 6 a) prepare the journal entries for 2015-2018 to record income tax expense (benefit) and income taxes payables (refundable) 176) Using the assumption in (a) prepare the income tax section of 2017 23 ) Prepare journal entries for 2017 and 2018 using the weight of available evidence 1/4 benefit of the loss carryforward will not be realized 30 d) Prepare the income tax expense section of the income statement for 2017 EX 191 19- 1 19-10E19 23 P19-1 Homestack Mining Type here to search

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