Use the information for Kyle Inc. given in BE18-13, but assume instead that it is more likely than not that the entire tax loss carryforward will not be realized in future years. Prepare all the journal entries that are necessary at the end of 2011 assuming
In BE Kyle Inc. incurred a net operating loss of $580,000 in 2011. Combined income for 2008, 2009, and 2010 was $460,000. The tax rate for all years is 35%. Prepare the journal entries to record the benefits of the carryback and the car ryforward, assuming it is more likely than not that the benefits of the loss carryforward will be realized.
(a) That Kyle does not use a valuation allowance account,
(b) That Kyle does use a valuation allowance account.