Andrew, Inc. provides DJ services for corporate parties. Andrew reported a net operating loss of $ 750,000 on its 2016 tax return. During the three preceding years, Andrew had taxable income and paid taxes at various tax rates, as noted below:

Although Andrew had a net operating loss in 2016, it was due to an unusual event. Andrew€™s management has substantial evidence to indicate that the company will be profitable over the foreseeable future and will incur a 34% tax rate for each of those years. In fact, during 2017, Andrew reported a profit of $ 800,000. Andrew does not report any book- tax differences.
Required
a. Prepare the journal entries to account for the NOL carryback and NOL carryforward in 2016. b. Compute reported net income (loss) after tax for 2016.
c. Prepare the journal entries to account for income taxes in 2017.
d. Compute reported net income after tax for 2017.

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Year 2013 2014 2015 Taxable Income $300,000 100,000 50,000 Income Tax Rate 34% 25% 15%