Problem 16-10 (Static) Net operating loss carryforward; multiple differences; financial statement effects [LO16-3, 16-5, 16-7] Fore Farms reported a pretax operating loss of $137 million for financlal reporting purposes in 2024 . Contributing to the loss were (a) a penalty of \$5 milition assessed by the Environmental Protection Agency for violation of a federal law and pald in 2024 and (b) an estimated loss of $12 million from accruing a loss contingency. The loss will be tax deductible when paid in 2025. The enacted tax rate is 25%. There were no temporary differences at the beginning of the year and none originating in 2024 other than those described above. Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2024. 2. What is the net loss reported in 2024 income statement? 3. Prepare the journal entry to record income taxes in 2025 assuming pretax accounting income is $160 million. No additional temporary differences originate in 2025. Complete this question by entering your answers in the tabs below. What is the net loss reported in 2024 income statement? Note: Enter your answars in millions ( (.,e.,10,000,000 should be entered as 10). Problem 16-10 (Static) Net operating loss carryforward; multiple differences; financial statement effects [LO16-3, 16-5, 16-7] Fore Farms reported a pretax operating loss of $137 million for financial reporting purposes in 2024 . Contributing to the loss were (a) a penality of $5 million assessed by the Environmental Protection Agency for volation of a federal law and paid in 2024 and (b) an estumated loss of $12 million from accruing a loss contingency. The loss will be tax deductible when paid in 2025 The enacted tax rate is 25%. There were no temporary differences at the beginning of the year and none originating in 2024 other than those described above. Requlred: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2024. 2. What is the net loss reported in 2024 income statement? 3. Prepare the journal entry to record income taxes in 2025 assuming pretax accounting income is $160 milion. No additional temporary differences originate in 2025. Complete this question by entering your answers in the tabs below. Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2024. Noter If no entry is required for a transaction/event, select "No joumal entry required" in the first account field. Enter your answers in millions (i.e.r, 10,000,000 should be entered as 10). Journal entry worksheet Record the income taxes for 2024. Note: Enter debits before credits. Problem 16-10 (Static) Net operating loss carryforward; multiple differences; financial statement effects [LO16-3, 16-5, 16-7] Fore Farms reported a pretax operating loss of $137 million for financlal reporting purposes in 2024 . Contributing to the loss were (a) a penalty of $5 milion assessed by the Environmental Protection Agency for violation of a federal law and paid in 2024 and (b) an estimated loss of $12 million from accruing a loss contingency. The loss will be tax deductible when paid in 2025 The enacted tax rate is 25%. There were no temporary differences at the beginning of the year and none originating in 2024 other than those described above. Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2024. 2. What is the net loss reported in 2024 income statement? 3. Prepare the journal entry to record income taxes in 2025 assuming pretax accounting income is $160 million. No additiona: temporary differences originate in 2025. Complete this question by entering your answers in the tabs below. Prepare the journal entry to record income taxes in 2025 assuming pretax accounting income is $160 million. No additional temporary differences originate in 2025 . Note: If no entry is required for a transaction/event, select "No joumal entry required" in the first account field. Enter your answers in milions (1.en 10,000,000 should be entered as 10). Journal entry worksheet
