Reference no: EM132509721

Question - Wyley Company had the following pre-tax accounting and taxable incomes for the years listed below (along with the applicable tax rates):

For all years, there were no differences between taxable income and pre-tax accounting income (i.e., there were no temporary or permanent differences). Assume current tax law allows net operating losses (NOLs) to be carried back two years and/or forward 20 years. Further assume Wyley uses the carryback provision for NOLs (i.e., carries back before carrying forward). In recording the benefits of any loss carryforward, assume it is more likely than not that positive taxable income will occur in the future (i.e., in 2020 and years later). The enacted tax rate for 2020 and years later is 35%.

REQUIRED -

1. Record the journal entry(ies) for income taxes for Wyley for 2019.

2. Prepare the income tax expense portion of the income statement for Wyley for 2019 starting with Loss before taxes (i.e., prepare the bottom part of the income statement in good form).