Please help me in understanding Intermediate Accounting Edition 16 Chapter 19 Exercise 21 (21E). Thank you for your time and attention.

E19-21.

(Carryback and Carryforward of NOL, No Valuation Account, No Temporary Differences)

(LO 3) The pretax financial income (or loss) figures for Jenny Spangler Company are as follows.

2012	$160,000?
2013	250,000?
2014	80,000?
2015	(160,000)
2016	(380,000)
2017	120,000?
2018	100,000?

Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2012 and 2013 and a 40% tax rate for the remaining years.

Instructions

Prepare the journal entries for the years 2014 to 2018 to record income tax expense and the effects of the net operating loss carrybacks and carryforwards assuming Jenny Spangler Company uses the carryback provision. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)