Wynn Farms reported a net operating loss of $180,000 for financial reporting and tax purposes in 2024. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows: Taxable IncomeTax RatesIncome Taxes Paid2020$ 80,00020%$ 16,000202190,0002018,0002022160,0002540,000202380,0003528,000Required:Prepare the journal entry to recognize the income tax benefit of the net operating loss. 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.Show the lower portion of the 2024 income statement that reports the income tax benefit of the net operating loss. Wynn Farms reported a net operating loss of $180,000 for financial reporting and tax purposes in 2024. The enacted tax rate is 25%.Taxable income, tax rates, and income taxes paid in Wynn's first four years of operation were as follows:2020282128222023TaxableIncome$ 80,00090,00020160,0002580,000 35TaxRates20%Required:1. Prepare the journal entry to recognize the Income tax benefit of the net operating loss. NOL carrybacks are not allowed for mostcompanies, except for property and casualty Insurance companies as well as some farm-related businesses. Assume Wynn Isone of those businesses.2. Show the lower portion of the 2024 Income statement that reports the Income tax benefit of the net operating loss.Complete this question by entering your answers in the tabs below.View transaction llestNo1Income TaxesPaid$ 16,00018,00040,00028,000Required 1 Required 2Prepare the journal entry to recognize the income tax benefit of the net operating loss. NOL carrybacks are not allowed for mostcompanies, except for property and casualty insurance companies as well as some farm-related businesses. Assume Wynn is one ofthose businesses.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers inwhole dollars.Transaction1View Journal entry worksheetGeneral JournalReceivable-Income tax refundIncome tax expenseDebitCreditShow less A

Operating Loss: The loss from the normal operations of a company is recorded as the operating loss…

Answered: Wynn Farms reported a net operating…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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	Taxable Income	Tax Rates	Income Taxes Paid
2020	$ 80,000	20%	$ 16,000
2021	90,000	20	18,000
2022	160,000	25	40,000
2023	80,000	35	28,000

Required:

Prepare the journal entry to recognize the income tax benefit of the net operating loss. 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.
Show the lower portion of the 2024 income statement that reports the income tax benefit of the net operating loss.

Wynn Farms reported a net operating loss of $180,000 for financial reporting and tax purposes in 2024. 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:
2020
2821
2822
2023
Taxable
Income
$ 80,000
90,000
20
160,000
25
80,000 35
Tax
Rates
20%
Required:
1. Prepare the journal entry to recognize the Income tax benefit of the net operating loss. 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.
2. Show the lower portion of the 2024 Income statement that reports the Income tax benefit of the net operating loss.
Complete this question by entering your answers in the tabs below.
View transaction llest
No
1
Income Taxes
Paid
$ 16,000
18,000
40,000
28,000
Required 1 Required 2
Prepare the journal entry to recognize the income tax benefit of the net operating loss. 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.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in
whole dollars.
Transaction
1
View Journal entry worksheet
General Journal
Receivable-Income tax refund
Income tax expense
Debit
Credit
Show less A

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