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% 2018 76,000 30 2019 110,000 40 2020 45 40,000 Income Taxes Paid $19,800 22,800 44,000 18,000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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%
2018
76,000 30
110,000 40
40,000 45
2019
2020
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.
Complete this question by entering your answers in the tabs below.
Required 1
Calculation
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
Transcribed Image Text: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% 2018 76,000 30 110,000 40 40,000 45 2019 2020 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. Complete this question by entering your answers in the tabs below. Required 1 Calculation 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
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