P$18\mathrm{.}5($LO$3)$ NOL without Valuation Account.

Jennings Inc. reported the following pretax income $($loss$)$ and related tax rates during the years $20242027.$

Year: $2024$ Pretax Income $($Loss$)$: $$80,000$ Tax Rate: $40\%.$ Year: $2025$ Pretax Income $($Loss$)$: $(180,000)$ Tax Rate: $40\%.$ Year: $2026$ Pretax Income $($Loss$)$: $230,000$ Tax Rate: $20\%.$ Year: $2027$ Pretax Income: $100,000$ Tax Rate: $20\%.$

Pretax financial income $($loss$)$ and taxable income $($loss$)$ were the same for all years since Jennings began business. The tax rates from $20242027$ were enacted in $2024.$

a$.$ Prepare the journal entry for the years $20252027$ to record income taxes payable $($refundable$),$ income tax expense $($benefit$),$ and the tax effects of the loss carryback and carryforward. Assume that Jennings 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 $2025$ entry$($ies$)$ has on the December $31,2025,$ balance sheet.

c$.$ For $2025$ Prepare the portion of the income statement, starting with $$Operating loss before income taxes,$$

d$.$ For $2026$ Prepare the portion of the income statement, starting with $$Income before income taxes,$$