wiley - AE19-9 Correct. (Carryback and Carryforward of NOL,...

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AE19-9 Correct.      (Carryback and Carryforward of NOL, No Valuation Account, No Temporary Differences)   The pretax financial income (or loss) figures for Jenny Spangler Company are as follows.    2002 $160,000   2003 250,000   2004 92,000   2005 (160,000)   2006 (400,000)   2007 150,000   2008 100,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2002 and 2003 and  a 40% tax rate for the remaining years.  Instructions  Prepare the journal entries for the years 2004 to 2008 to record income tax expense and the effects of the net operating loss carrybacks and  carryforwards assuming Jenny Spangler Company uses the carryback provision. All income and losses relate to normal operations. (In  recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)  Date Description Debit Credit 2004 Income Tax Expense  36800              Income Tax Payable    36800  2005 Income Tax Refund Receivable  72000              Benefit Due to Loss Carryback    72000  2006 Income Tax Refund Receivable  36800              Benefit Due to Loss Carryback    36800    (To record carryback)     2006 Deferred Tax Asset  123200              Benefit Due to Loss Carryforward    123200    (To record carryforward)     2007 Income Tax Expense  60000              Deferred Tax Asset    60000  2008 Income Tax Expense  40000              Deferred Tax Asset    40000  E19-23 Correct.      (NOL Carryback and Carryforward, Valuation Account versus No Valuation Account) 
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Spamela Hamderson Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. (Assume the 
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This note was uploaded on 05/04/2009 for the course MKTNG 330 taught by Professor Bita during the Spring '09 term at Montclair.

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wiley - AE19-9 Correct. (Carryback and Carryforward of NOL,...

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