Use the information for Kyle Inc. given in BE18-16, 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 2017 assuming
(a) That Kyle does not use a valuation allowance account, and
(b) That Kyle does use a valuation allowance account.
In BE18-16
Kyle Inc. incurred a net operating loss of $580,000 in 2017. Combined income for 2014, 2015, and 2016 was $460,000. The tax rate for all years is 30%. Prepare the journal entries to record the benefits of the carryback and the carryforward, assuming it is more likely than not that the benefits of the loss carryforward will be realized.