Wynn Sheet Metal reported an operating loss of $160,000 for financial reporting and tax purposes in 2013. The enacted tax rate is 40%. 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

2009 60,000 30% 18,000

2010 70,000 30% 21,000

2011 80,000 40% 32,000

2012 60,000 45% 27,000

Required

• Prepare the J/E to recognize income tax benefit to the operating loss. Wynn elects the carryback option.

Journal entry at the end of 2013

Receivable income tax refund ($32 + 27) Dr $59

Deferred tax asset (As above) Dr $8

Income tax benefit operating loss (to Bal) Cr $67

Show the lower portion of the 2013 income statement that reports the income tax benefit of the operating loss.

(b) lower portion of the 2013 income statement:

Operating loss before income taxes $160

Less: Income tax benefit:

Tax refund from loss carryback $59

Future tax savings from loss carryfwd $8 ($67)

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Net operating loss $93

3- assume that wynn reports 80,000$ of income for both financial reporting and tax purposes in 2014. Record the appropriate entry for 2014 to accurately reflect wynns accounting for income taxes that year.

please help to answer requirement3, thanks.