Aurora Incorporated provided you with the following information:

Aurora reported no book- tax differences and elected the carryback/ carryforward option for its year 3 loss. Future tax rates are not expected to change.
Required
a. Prepare any necessary journal entries needed to record the Year 3 tax provision assuming that Aurora only expects $ 200,000 in future taxable income over the carry forward period.
b. Prepare a partial income statement for year 3.

Transcribed Image Text:

Income (Loss) Year Before Tax $405,000 220,000 (975,000) Tax Rate 3496 3496 2496 2