Fore Farms reported a pretax operating loss of $300 million for financial reporting purposes in 2021. Contributing to the loss were (a) a penalty of $4 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2021 and (b) an estimated loss of $20 million from accruing a loss contingency. The loss will be tax deductible when paid in 2022.

The enacted tax rate is 25%. There were no temporary differences at the beginning of the year and none originating in 2021 other than those described above.

Taxable income in Foress two previous years of operation was as follows:

2019 $ 136 million

2020 $ 112 million

Required:

1. Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2021. Assume Fore will carry back its NOL to prior years.

2. What is the net operating loss reported in 2021 income statement?

3. Prepare the journal entry to record income taxes in 2022 assuming pretax accounting income is $320 million. No additional temporary differences originate in 2022.

Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2021. Assume Fore will carry back its NOL to prior years. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet Record 2021 income taxes. Debit Credit Note: Enter debits before credits. Transaction General Journal 1 Income tax expense Income tax payable Deferred tax asset Required 1 Required 2 Required 3 What is the net operating loss reported in 2021 income statement? (Enter your answer in millions (i.e., 10,000,000 should be entered as 10).) Net operating loss million Prepare the journal entry to record income taxes in 2022 assuming pretax accounting income is $320 million. No additional temporary differences originate in 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet Record 2022 income taxes. Note: Enter debits before credits. General Journal Debit Credit Transaction 1