Operating Loss Refer to the information in P18 10 and modify it as follows: Ross Company decided to carry back its 2016 operating loss. Furthermore, since Ross had already begun to develop the new product at the end of 2016 and had contracts for its sale in 2017, the company was confident at the end of 2016 that it would earn sufficient taxable income in the future carryforward period.
In exercise

Required:
1. Prepare Ross€™s income tax journal entries at the end of 2016.
2. Prepare Ross€™s 2016 income statement. Include a note for any operating loss carryforward recognition.
3. Prepare the journal entry to record the receipt of the refund check on June 1, 2017.
4. Prepare the income tax journal entry at the end of 2017.
5. Prepare Ross€™s 2017 income statement.

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Expanses 2012 $182,000 $150,000 170,000 253,000 180,000 196,000 2013 2014 2015 220,000 241,000