Wynn Farms reported a net operating loss of $190,000 for financial reporting and tax purposes in 2021. 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: Taxable Tax Income Rates 2017 $ 66,000 30% 76,000 30 2018 2019 110,000 40 2020 40,000 45 Income Taxes Paid $19,800 22,800 44,000 18,000 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 2021 income statement that reports the income tax benefit of the net operating loss. Required 1 Calculation Complete this question by entering your answers in the tabs below. Required 1 GJ Required 2 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. (Enter your answers in thousands (i.e., 55,000 should be entered as 55). Leave no cell blank, enter "0" wherever applicable. Enter all amounts as positive values.) Show less
Wynn Farms reported a net operating loss of $190,000 for financial reporting and tax purposes in 2021. 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: Taxable Tax Income Rates 2017 $ 66,000 30% 76,000 30 2018 2019 110,000 40 2020 40,000 45 Income Taxes Paid $19,800 22,800 44,000 18,000 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 2021 income statement that reports the income tax benefit of the net operating loss. Required 1 Calculation Complete this question by entering your answers in the tabs below. Required 1 GJ Required 2 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. (Enter your answers in thousands (i.e., 55,000 should be entered as 55). Leave no cell blank, enter "0" wherever applicable. Enter all amounts as positive values.) Show less
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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