Exercise 19-24 (Part Level Submission)
Pina Inc. reports the following pretax income (loss) for both book and tax purposes. (Assume the
carryback provision is used where possible for a net operating loss.) Year Pretax
Income (Loss) Tax Rate 2015 $123,000 40 % 2016 98,000 40 % 2017 (270,000 ) 45 % 2018 110,000 45 % The tax rates listed were all enacted by the beginning of 2015. (a) Your answer is partially correct. Try again.
Prepare the journal entries for years 2015–2018 to record income tax expense (benefit) and
income taxes payable (refundable), and the tax effects of the loss carryback and 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. (Credit account titles
are automatically indented when amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and enter 0 for the
amounts.)
Date
2015 Account Titles and
Explanation
Income Tax Expe Debit
49200 Income Tax Paya 2016 Income Tax Expe 49200
39200 Income Tax Paya 2017 Credit 39200 Income Tax Refu 88400 Deferred Tax Ass 22050 Benefit Due to Lo 88400 Benefit Due to Lo 22050 (To record refund.)
Benefit Due to Lo 2756.25 Allowance to Red 2756.25 (To record allowance.)
2018 Income Tax Expe 49500 Income Tax Paya 27450 Deferred Tax Ass 22050 (To record income taxes.)
Allowance to Red 2756.25 Benefit Due to Lo 2756.25 (To adjust allowance.)
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LINK TO TEXT Attempts: 3 of 3 used (b)
Prepare the income tax section of the 2017 income statement beginning with the line “Operating
loss before income taxes.” (Enter loss using either a negative sign preceding the number
e.g. -45 or parentheses e.g. (45).)
Pina Inc.
Income Statement (Partial) $ $ $

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