2. (Carryforward of NOL, No Valuation Account, No Temporary Differences) The pretax financial income (or...
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2. (Carryforward of NOL, No Valuation Account, No Temporary Differences) The pretax financial income (or loss) figures for Metals, Inc. are as follows. 2012 65,000
2013 40,000
2014 (230,000)
2015 70,000
Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 35% tax rate for all the years. Prepare the journal entries for the years 2012 to 2015 to record income tax expense and the effects of the net operating loss carryforwards. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)
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