Wynn Farms reported a net operating loss of $165,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25%. 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 2017 $ 61,000 30 % $ 18,300 2018 71,000 30 21,300 2019 85,000 40 34,000 2020 40,000 45 18,000 Required: 1. NOL carrybacks are not allowed for most companies, except for property and casualty insurance companies as well as some farm-related businesses. Assume Wynn is one of those businesses. Complete the table given below and prepare the journal entry to recognize the income tax benefit of the net operating loss. 2. Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss.

Complete this question by entering your answers in the tabs below.

Required 1 Calculation

Required 1 GJ

Required 2

NOL carrybacks are not allowed for most companies, except for property and casualty insurance companies as well as some farm-related businesses. Assume Wynn is one of those businesses. Complete the following table to recognize the income tax benefit of the net operating loss. (Enter your answers in whole dollars. Leave no cell blank, enter "0" wherever applicable. Enter all amounts as positive values.)

Operating loss carryback			Rate %		Tax $	Recorded as:
Carried back - 2017		x		=
Carried back - 2018		x		=
Carried back - 2019		x		=
Carried back - 2020		x		=
Total carryback
Operating loss carryforward
Carried forward		x		=

Prepare the journal entry to recognize the income tax benefit of the net operating loss. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Journal entry worksheet

Record 2021 income tax benefit from operating loss.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
1

Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in whole dollars.)

Income tax benefit:

Required 1 Calculation

Required 1 GJ

Required 2

Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in whole dollars.)

Income tax benefit:

All journal entries must come from this list:.

Income tax expense

Operating loss before income taxes

Tax refund from NOL carryback

Tax savings from NOL carryforward

No journal entry required

Accumulated depreciation

Cash

Deferred tax asset

Deferred tax liability

Depreciation expense

Equipment

Income tax expense

Income tax payable

Insurance expense

Interest expense

Interest payable

Inventory

Prepaid insurance

ReceivableIncome tax refund

Retained earnings