(Carryback and Carryforward of NOL, No Valuation Account, No Temporary Differences) The pretax financial income (or loss) figures for Synergetics Company are as follows.
2008 ...... $160,000
2009 ..... 250,000
2010 ....... 90,000
2011 ..... (160,000)
2012 ..... (350,000)
2013 ..... 120,000
2014 ...... 100,000
Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2008 and 2009 and a 40% tax rate for the remaining years.
Instructions
Prepare the journal entries for the years 2010 to 2014 to record income tax expense and the effects of the net operating loss carrybacks, and carryforwards, assuming Synergetics 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.)