Need help with B and C

(LO 3) (NOL Carryforward, Valuation Account Needed) Beilman Inc. reports the following pretax income (loss) for both book and tax purposes.

Year

Pretax Income (Loss)

Tax Rate

2018

$120,000)000

20%0

2019

90,000)000

20%0

2020

(280,000)000

25%0

2021

120,000)000

25%0

The tax rates listed were all enacted by the beginning of 2018.

Instructions

a. Prepare the journal entries for years 20182021 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized.

b. Prepare the income tax section of the 2020 income statement beginning with the line Operating loss before income taxes.

c. Prepare the income tax section of the 2021 income statement beginning with the line Income before income taxes.

A)2018

Income Tax Expense 24,000

Income Tax Payable 24,000

2019

Income Tax Expense 18,000

Income Tax Payable 18,000

2020

Deferred Tax Asset 70,000

Income Tax expense 70,000

Income Tax Expense 35,000

Allowance to Reduce Deferred Tax Asset 35,000

2021

Income Tax Expense 30,000

Deferred Tax Asset 24,000

Income Tax Payable 6,000

Allowance to Reduce Deferred Tax Asset 12,000

Income Tax Expenses 12000

B) 2020 income statement

For the year ended December 31, 2020

Operating loss before income tax (280,000)

Income tax benefit

Deferred 35,000

Net loss (245,000)

C) 2021 income statement

for the year ended December 31, 2021

income before income taxes 120,000

income tax expenses:

deferred 24,000

current 6,000

Benefit because of loss carryforward 18,000

Net Income/(loss) 102,000