Recording Net Operating Loss Carryforward In 2020, Cardinals Company operated at a tax loss, totaling $35,200 during its first year of business. Assuming a tax rate of 25%, and that income is expected in 2021, record the entry to reflect the tax benefit of the net operating loss on December 31, 2020. Cardinals Company determined that it was more likely than not that 75% of the deferred tax asset would not be realized. Recording Net Operating Loss Carryforward In 2020, Cardinals Company operated at a tax loss, totaling $35,200 during its first year of business. Assuming a tax rate of 25%, and that income is expected in 2021, record the entry to reflect the tax benefit of the net operating loss on December 31, 2020. Cardinals Company determined that it was more likely than not that 75% of the deferred tax asset would not be realized. Account Name Dr. Cr. Date Dec. 31, 2020 To record tax benefit of net operating loss Dec. 31, 2020 To record allowance for deferred income tax