Exercise 16 22 Net operating loss carryback and carryforward LO16 7 Wynn Sheet Metal reported an operating loss of $198,000 for financial reporting and tax purposes in 2016 The enacted tax rate is 40 Taxable income, tax rates, and income taxes paid in Wynns first four years of operation were as follows Taxable Income Tax Rates Income Taxes Paid 2012 $ 79,000 30 $ 23,700 2013 89,000 30 26,700 2014 99,000 40 39,600 2015 79,000 45 35,550 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 (If no entry is required for a transaction event, select No journal entry required in the first account field Enter your answers in thousands Leave no cell blank, enter 0 wherever applicable ) 2 Show the lower portion of the 2016 income statement that reports the income tax benefit of the operating loss (Amounts to be deducted should be indicated with a minus sign Enter your answers in thousands )

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Exercise 16-22 Net operating loss carryback and carryforward [LO16-7] Wynn Sheet Metal reported an operating loss of $198,000 for financial reporting and tax purposes in

Exercise 16-22 Net operating loss carryback and carryforward [LO16-7]

Wynn Sheet Metal reported an operating loss of $198,000 for financial reporting and tax purposes in 2016. The enacted tax rate is 40%. Taxable income, tax rates, and income taxes paid in Wynns first four years of operation were as follows:

	Taxable Income		Tax Rates		Income Taxes Paid
2012	$	79,000	30	%	$	23,700
2013		89,000	30			26,700
2014		99,000	40			39,600
2015		79,000	45			35,550

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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands. Leave no cell blank, enter "0" wherever applicable.)

2.	Show the lower portion of the 2016 income statement that reports the income tax benefit of the operating loss. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.)