Colavecchia Ltd. had a taxable loss of $1,500,000 in 20X8. The tax rate in 20X8 is 28%. In the past three years, the company had the following taxable income and tax rates:

There are no temporary differences other than those created by income tax losses. The loss was triggered by a downturn in the economy.

Required:
1. What is the amount of refund that will be claimed in 20X8?
2. What is the amount of the loss carryforward?
3. Assuming that loss carryforward usage is probable, prepare a journal entry for income tax in 20X8.
4. Assuming that loss carryforward usage is not probable, prepare a journal entry for income tax in 20X8.

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Taxable income Tax rate 20X5 $420,000 25% 20X6 $300,000 25% 20X7 $210,000 25%