Chapter 16-Problem 5. Wynn Sheet Metal reported an operating loss of $174,000 for financial reporting and tax purposes in 2018. The enacted tax rate is 40%. Taxable income, tax rates, and income taxes paid in Wynns first four years of operation were as follows:

Taxable Tax Income Taxes

Income Rates Paid

2014 $67,000 30% $20,100

2015 77,000 30 23,100

2016 87,000 40 34,800

2017 67,000 45 30,150

Required:

1. Complete the following table given below and prepare the journal entry to recognize the income tax benefit of the operating loss. Wynn elects the carryback option.
2. Show the lower portion of the 2018 income statement that reports the income tax benefit of the operating loss.

Complete the following table given below to record income taxes. (Enter your answers in thousands. Round your answers to two decimal places. Leave no cell blank, enter 0 wherever applicable.)

Operating loss carryback			Rate %		Tax $	Recorded as:
Carried back-2014		x		=
Carried back-2015		x		=
Carried back-2016		x		=
Carried back-2017		x		=
Total carryback
Operating loss carryforward
Carried forward		x		=

Record 2018 income tax benefit from operating loss.

Event_____ General Journal___________ Debit_________ Credit_______

Show the lower portion of the 2018 income statement that reports the income tax benefit of the operating loss. Income tax benefit__________________________