1 value: 10.00 points Problem 16-10 Net operating loss carry back and carryforward; multiple differences [L016-2, 16-4,16-7] Fores Construction Company reported a pretax operating loss of S260 million for financial reporting purposes in 2016. Contributing to the loss were (a) a penalty of $15 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2016 and (b) an estimated loss of 20 million from accruing a loss contingency. The loss will be tax deductible when paid in 2017 The enacted tax rate is 40%. There were no temporary differences at the beginning of the year and none originating in 2016 other than those described above. Taxable income in Fores's two previous years of operation was as follows: 2014 $135 million 2015 80 million Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2016. Fores elects the carryback option. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Record 2016 income taxes 1 Credit Note journal entry has been entered Record entry Clear entry View general journal EX 2. What is the net operating loss reported in 2016 income statement? (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Net operating loss million 3. Prepare the journal entry to record income taxes in 2017 assuming pretax accounting income is $120 million. No additional temporary differences originate in 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list X: Record 2017 income taxes. 1 Credit Note journal entry has been entered Record entry Clear entry View general journal