Question
Wynn Sheet Metal reported an operating loss of $168,000 for financial reporting and tax purposes in 2018. The enacted tax rate is 40%. Taxable income,
Wynn Sheet Metal reported an operating loss of $168,000 for financial reporting and tax purposes in 2018. 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 2014 $ 64,000 30 % $ 19,200 2015 74,000 30 22,200 2016 84,000 40 33,600 2017 64,000 45 28,800 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. 2. Show the lower portion of the 2018 income statement that reports the income tax benefit of the operating loss.
Wynn Sheet Metal reported an operating loss of $168,000 for financial reporting and tax purposes in 2018. The enacted tax 40%. Taxable income tax rates, and income taxes paid In Wynn's first four years of operation were as follows: points 2014 2015 2016 2017 Taxable Income $64,000 74, 84,00 64.000 Tax Rates 3806 38 40 45 Income Taxes Paid $19,200 22,200 33,680 28.900 Required: 1. Complete the following table given below and prepare the journal entry to recognize the Income tax benefit of the operat Wynn elects the carryback option. 2 Show the lower portion of the 2018 Income statement that reports the Income tax benefit of the operating loss. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Calculation Required 1 G) Required 2 Complete the following table given below to record income taxes. (Enter your answers in thousands. Round your answers to two decimal places. Leave no cell blank, enter "0" wherever applicable.) Rate Tax $ Recorded as: $ $ Operating loss carryback Carried back-2014 Carried back-2015 Carried back-2016 0 x 0 X 84,000 X 30% 30% = = 0 0 X 40% 33,800.00 Carried back - 2017 64,000 x 45% 28,800.00 162.400.00 Receivable-income tax refund Receivable-in Total carryback Operating loss carryforward Carried forward 4.800.00 x 40% = $1,920.00 Deferred tax assetendingStep by Step Solution
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