Question

Wynn Farms reported a net operating loss of $205,000 for financial reporting and tax purposes in...

Wynn Farms reported a net operating loss of $205,000 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
Income		 Tax
Rates		 Income Taxes
Paid
2017 $ 69,000 30 % $ 20,700
2018 79,000 30 23,700
2019 125,000 40 50,000
2020 40,000 45 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.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Wynn Sheet Metal reported a net operating loss of $130,000 for financial reporting and tax purposes...
Wynn Sheet Metal reported a net operating loss of $130,000 for financial reporting and tax purposes in 2018. The enacted tax rate is 30%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows: Taxable Income Tax Rates Income Taxes Paid 2014 $ 75,000 20 % $ 15,000 2015 85,000 20 17,000 2016 95,000 30 28,500 2017 75,000 40 30,000 Required: 1. Prepare the journal entry to recognize the income tax benefit...
Wynn Sheet Metal reported a net operating loss of $116,000 for financial reporting and tax purposes...
Wynn Sheet Metal reported a net operating loss of $116,000 for financial reporting and tax purposes in 2018. The enacted tax rate is 35%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows: Taxable Income Tax Rates Income Taxes Paid 2014 $ 68,000 25 % $ 17,000 2015 78,000 25 19,500 2016 88,000 35 30,800 2017 68,000 40 27,200 Required: 1. Prepare the journal entry to recognize the income tax benefit...
Fore Farms reported a pretax operating loss of $292 million for financial reporting purposes in 2021....
Fore Farms reported a pretax operating loss of $292 million for financial reporting purposes in 2021. Contributing to the loss were (a) a penalty of $4 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2021 and (b) an estimated loss of $10 million from accruing a loss contingency. The loss will be tax deductible when paid in 2022. The enacted tax rate is 25%. There were no temporary differences at the beginning...
Fore Farms reported a pretax operating loss of $240 million for financial reporting purposes in 2021....
Fore Farms reported a pretax operating loss of $240 million for financial reporting purposes in 2021. Contributing to the loss were (a) a penalty of $16 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2021 and (b) an estimated loss of $30 million from accruing a loss contingency. The loss will be tax deductible when paid in 2022. The enacted tax rate is 25%. There were no temporary differences at the beginning...
Fore Farms reported a pretax operating loss of $150 million for financial reporting purposes in 2021....
Fore Farms reported a pretax operating loss of $150 million for financial reporting purposes in 2021. Contributing to the loss were (a) a penalty of $10 million assessed by the Environmental Protection Agency for violation of federal law and paid in 2021 and (b) an estimated loss of $20 million from accruing a loss contingency. The loss will be tax-deductible when paid in 2022. The enacted tax rate is 25%. There were no temporary differences at the beginning of the...
Fore Farms reported a pretax operating loss of $240 million for financial reporting purposes in 2021....
Fore Farms reported a pretax operating loss of $240 million for financial reporting purposes in 2021. Contributing to the loss were (a) a penalty of $16 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2021 and (b) an estimated loss of $20 million from accruing a loss contingency. The loss will be tax deductible when paid in 2022. The enacted tax rate is 25%. There were no temporary differences at the beginning...
Fore Farms reported a pretax operating loss of $220 million for financial reporting purposes in 2021....
Fore Farms reported a pretax operating loss of $220 million for financial reporting purposes in 2021. Contributing to the loss were (a) a penalty of $4 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2021 and (b) an estimated loss of $10 million from accruing a loss contingency. The loss will be tax deductible when paid in 2022. The enacted tax rate is 25%. There were no temporary differences at the beginning...
Fore Farms reported a pretax operating loss of $150 million for financial reporting purposes in 2021....
Fore Farms reported a pretax operating loss of $150 million for financial reporting purposes in 2021. Contributing to the loss were (a) a penalty of $6 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2021 and (b) an estimated loss of $10 million from accruing a loss contingency. The loss will be tax deductible when paid in 2022. The enacted tax rate is 25%. There were no temporary differences at the beginning...
Tobac Company reported an operating loss of $132,000 for financial reporting and tax purposes in 2013....
Tobac Company reported an operating loss of $132,000 for financial reporting and tax purposes in 2013. The enacted tax rate is 40% for 2013 an all future years. Assume that Tobac elects loss carryback. Taxable income, tax rates, and taxes paid for the four preceding years are as follows: Taxable Income Tax Rate Taxes Paid 2009 30,000 30% 9,000 2010 35,000 35% 10,500 2011 42,000 35% 14,700 2012 40,000 40% 16,000 Tobac concludes that is more likely than not that...
Fores Construction Company reported a pretax operating loss of $120 million for financial reporting purposes in...
Fores Construction Company reported a pretax operating loss of $120 million for financial reporting purposes in 2018. Contributing to the loss were (a) a penalty of $10 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2018 and (b) an estimated loss of $10 million from accruing a loss contingency. The loss will be tax deductible when paid in 2019. The enacted tax rate is 40%. There were no temporary differences at the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT