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Wynn Sheet Metal reported an operating loss of $204,000 for financial reporting and tax purposes in...

Wynn Sheet Metal reported an operating loss of $204,000 for financial reporting and tax purposes in 2018. The enacted tax rate is 40%. 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
2014 $ 82,000 30 % $ 24,600
2015 92,000 30 27,600
2016 102,000 40 40,800
2017 82,000 45 36,900


Required:
1. Complete the following table given below and prepare the journal entry to recognize the income tax benefit of the operating loss. Wynn elects the carryback option.

Complete the following table given below to record income taxes. (Enter your answers in thousands. Round your answers to two decimal places. Leave no cell blank, enter "0" wherever applicable.)
Operating loss carryback Rate % Tax $ Recorded as:
Carried back - 2014 x =
Carried back - 2015 x =
Carried back - 2016 x =
Carried back - 2017 x =
Total carryback
Operating loss carryforward
Carried forward x =

ALSO, record 2018 income tax benefit from operating loss. (Journal Entry)


2. Show the lower portion of the 2018 income statement that reports the income tax benefit of the operating loss.

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Expert Solution

ekkarill92 answered 1 year ago
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