Business, 16.10.2020 17:01 jessebeck0805

Wynn Farms reported a net operating loss of $160,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows: Taxable Income Tax Rates Income Taxes Paid
2017 $60,000 15% $9,000
2018 70,000 15 10,500
2019 80,000 25 20,000
2020 60,000 30 18,000

Required:
a. Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss.
b. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Wynn elects the carryback option.

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Wynn Farms reported a net operating loss of $160,000 for financial reporting and tax purposes in 202...

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