Question
Wynn Sheet Metal reported an operating loss of $202,000 for financial reporting and tax purposes in 2018. The enacted tax rate is 40%. Taxable income,
Wynn Sheet Metal reported an operating loss of $202,000 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 | $ | 81,000 | 30 | % | $ | 24,300 | |||
2015 | 91,000 | 30 | 27,300 | ||||||
2016 | 101,000 | 40 | 40,400 | ||||||
2017 | 81,000 | 45 | 36,450 | ||||||
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. 2. Show the lower portion of the 2018 income statement that reports the income tax benefit of the operating loss.
Required 1 Calculation
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.)
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Required 1GJ. Record 2018 income tax benefit from operating loss.
Required 2.
Show the lower portion of the 2018 income statement that reports the income tax benefit of the operating loss. (Amounts to be deducted should be indicated with a minus sign. Round your answers to two decimal places. Enter your answers in thousands.)
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