Bender Inc. reported the following information for the years ended December 31, 2012 through 2015: Year Net income Income taxes paid 2012 $ 350,000 $122,500 2013 $ 300,000 105,000 2014 $ 600,000 210,000 $ 500,000 175,000 Bender Inc. reported a $1,600,000 operating loss for 2016 before carryback and carryforward tax benefits. At December 31, 2016, Bender concluded that it was more likely than not that $100,000 of its operating loss would not be used in the future. The income tax rate is 35% for all years.

A. At December 31, 2016, Bender decided to carryback its operating loss the maximum number of years prescribed by the Internal Revenue Code. In the journal entry to record the carryback, which of the following statements is correct?

A. Income tax refund receivable should be charged and income tax expense should be credited.

B. The amount recorded should be $385,000.

A and B.

Neither A nor B.

B. In the journal entry to record the carryforward at December 31, 2016, Bender should

A. debit deferred tax asset

B. for the amount of $400,000.

A and B.

Neither A nor B.

C. In the journal entry to record the carryforward at December 31, 2016, Bender should

A. credit benefit due to loss carryforward

B. for the amount of $140,000.

A and B.

Neither A nor B.

D. What is Benders net loss for the year ended December 31, 2016?

$1,075,000.

$815,000.

$1,040,000.

$1,215,000.