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(Solved) (Latest ver. Aug 2020) - Operating Loss

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At the end of 2010, Nelson Inc. reports a pretax operating loss of $80,000 for both financial reporting and income tax purposes. Prior to 2010 the company had reported and paid taxes on the following pretax financial income: 2007, $37000; 2008, $50000; 2009, $54000. The company had been subject to tax rates of 20% for 2007, 25% for 2008, and 30% for 2009.

Please help me and explain how to prepare the income tax journal entry for the end of 2010 and prepare the lower portion of the 2010 Income statement.


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