Fores Construction Company reported a pretax operating loss of $210 million for financial reporting purposes in 2013. Contributing to the loss were (a) a penalty of $10 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2013 and (b) an estimated loss of $20 million from accruing a loss contingency. The loss will be tax deductible when paid in 2014.

The enacted tax rate is 40%. There were no temporary differences at the beginning of the year and none originating in 2013 other than those described above. Taxable income in Foress two previous years of operation was as follows:

2011	$	110	million
2012		55	million

1.

Prepare the journal entry to recognize the income tax benefit of the operating loss in 2013. Fores elects the carryback option.

2.

What is the net operating l

3.	Prepare the journal entry to record income taxes in 2014 assuming pretax accounting income is $90 million. No additional temporary differences originate in 2014.

oss reported in 2013 income statement? (Enter your answer in millions.)