Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wynn Farms reported a net operating loss of $185,000 for financial reporting and tax purposes in 2024. The enacted tax rate is 25%. Taxable

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Wynn Farms reported a net operating loss of $185,000 for financial reporting and tax purposes in 2024. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynn's first four years of operation were as follows: 2020 2021 2022 2023 Taxable Income $ 65,000 Income Taxes Tax Rates Paid 30% $19,500 75,000 105,000 60,000 30 22,500 40 42,000 45 27,000 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 2024 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 Required 1 G) Required 2 Calculation 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. Note: Enter your answers in whole dollars. Leave no cell blank, enter "0" wherever applicable. Enter all amounts as positive values. Operating loss carryback Recorded as: Show less A Carried back-2020 Camed back-2021 Carried back-2022 Carried back-2023 Total carryback Operating loss carryforward Camed forward Rate % Tax S x x x x Required 1 Calculation Required 1 GJ > Operating loss carryback Carried back - 2020 Carried back-2021 Carried back-2022 Carried back-2023 Total carryback Operating loss carryforward Carried forward x X Rate % Tax $ Recorded as: Deferred tax asset-beginning Deferred tax asset-ending Deferred tax liability-beginning Deferred tax liability-ending Journal entry worksheet 1 Record 2024 income tax benefit from operating loss. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal Required 1 Calculation Required 1 GJ Required 2 Show the lower portion of the 2024 income statement that reports the income tax ben Note: Amounts to be deducted should be indicated with a minus sign. Enter your answ Income tax expense Operating loss before income taxes Tax refund from NOL carryback Tax savings from NOL carryforward red 1 GJ 0 $ 0 Required

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting What the Numbers Mean

Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,

9th Edition

978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062

More Books

Students also viewed these Accounting questions

Question

2. Explain how the terms bit, byte, nibble, and word are related.

Answered: 1 week ago