W. Pickett Fence Company incurred a net loss for year 3. The firm does not have any book- tax differences. We present the results of operations for the first three years of the company€™s operations below:

Future tax rates are expected to be 35%. W. Pickett always elects the carry back / carry forward option and there are no uncertainties regarding realization of future tax benefits. Prepare the journal entry (s) required to record the year 3 net operating loss.

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Income (Loss) Year Before Tax $300,000 200,000 450,000) Tax Rate 40% 35% 35%