Hayes Co reported the following pretax financial income

(NOL Carry back and Carry forward, Valuation Account Needed) Hayes Co. reported the
following pretax financial income (loss) for the years 2009–2013.2009 $240,0002010
350,0002011 90,0002012 (550,000)2013 180,000Pretax financial income (loss) and taxable
income (loss) were the same for all years involved. The enacted tax rate was 34% for 2009 and
2010, and 40% for 2011–2013. Assume the carry back provision is used first for net operating
losses.(a) Prepare the journal entries for the years 2011–2013 to record income tax expense,
income tax payable (refundable), and the tax effects of the loss carry back and loss carry
forward, assuming that based on the weight of available evidence, it is more likely than not that
one-fifth of the benefits of the loss carry forward will not be realized.(b) Prepare the income tax
section of the 2012 income statement beginning with the line “Income (loss) before income
taxes.”View Solution:
Hayes Co reported the following pretax financial income
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