Wynn Sheet Metal reported an operating loss of $162,000 for financial reporting and tax purposes in 2016. 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
2012	$	61,000	30	%	$	18,300
2013		71,000	30			21,300
2014		81,000	40			32,400
2015		61,000	45			27,450

Required:

1.

Complete the following table given below and prepare the journal entry to recognize the income tax benefit of the operating loss. Wynn elects the carryback option. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands. Leave no cell blank, enter "0" wherever applicable.)

Operating loss carryback

Rate %

Tax $

Recorded as:

Carried back - 2012

x

=

Carried back - 2013

x

=

Carried back - 2014

x

=

Carried back - 2015

x

=

Total carryback

Operating loss carryforward

Carried forward

2.	Show the lower portion of the 2016 income statement that reports the income tax benefit of the operating loss.

• Record 2016 income tax benefit from operating loss.

x

=