Parnevik Inc. reported the following pretax income (loss) and related tax rates during the years 2004€“2010.

Pretax financial income (loss) and taxable income (loss) were the same for all years since Parnevik began business. The tax rates from 2007€“2010 were enacted in 2007.
Instructions
(a) Prepare the journal entries for the years 2008€“2010 to record income tax payable (refundable), income tax expense (benefit), and the tax effects of the loss carryback and carryforward. Assume that Parnevik elects the carryback provision where possible and expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year.
(b) Indicate the effect the 2008 entry (ies) has on the December 31, 2008, balance sheet.
(c) Prepare the portion of the income statement, starting with €œOperating loss before income taxes,€ for 2008.
(d) Prepare the portion of the income statement, starting with €œIncome before income taxes,€ for2009.

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ax Income (oss Tax Rate 2004 2005 2006 2007 2008 2009 2010 $40,000 25.000 60,000 80,000 (200,000) 70,000 90,000 30% 30% 30% 40% 45% 40% 35%