During 2018, its first year of operations, Baginski Steel Corporation reported a net operating loss of $420,000 for financial reporting and tax purposes. The enacted tax rate is 35%. Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight of available evidence suggests future taxable income sufficient to benefit from future deductible amounts from the net operating loss carryforward. 2. Show the lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss.

8 During 2018, its first year of operations, Baginski Steel Corporation reported a net operating loss of $420,000 for financial reporting and tax purposes. The enacted tax rate is 35%. Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight of available evidence suggests future taxable income sufficient to benefit from future deductible amounts from the net operating loss carryforward. 2. Show the lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss. 6.22/11.11 points awarded Scored Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight of available evidence suggests future taxable income sufficient to benefit from future deductible amounts from the net operating loss carryforward. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands.) No Event General Journal Debit Credit 1 1 147,000 X Deferred tax asset Income tax benefit-Net operating loss 147,000 8 During 2018, its first year of operations, Baginski Steel Corporation reported a net operating loss of $420,000 for financial reporting and tax purposes. The enacted tax rate is 35%. Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight of available evidence suggests future taxable income sufficient to benefit from future deductible amounts from the net operating loss carryforward. 2. Show the lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss. 6.22/11.11 points awarded Scored Complete this question by entering your answers in the tabs below. Required 1 Required 2 Show the lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.) 420.000 Operating loss before income taxes Income tax benefit-net operating loss 147,000 X Net loss 567,000