In 2014, due to an intentional adulteration of its fields by a large pesticide company, Herbivore...

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In 2014, due to an intentional adulteration of its fields by a large pesticide company, Herbivore Organix reported an operating loss of $188,000 for financial reporting and tax purposes. The enacted tax rate is 39%. Taxable income, tax rates, and income taxes paid in Herbivore's first four years of operation were as follows: Taxable Income $62,000 75,000 87,000 89,000 Tax Rates 35% 36 38 Income Taxes Paid $ 21,700 27,000 33,060 32,930 2010 2011 2012 2013 37 Required: 1. Prepare the journal entry to recognize the income tax benefit of the operating loss. Herbivore elects the carryback option. 2. Compute Herbivore's net loss for 2014. In 2014, due to an intentional adulteration of its fields by a large pesticide company, Herbivore Organix reported an operating loss of $188,000 for financial reporting and tax purposes. The enacted tax rate is 39%. Taxable income, tax rates, and income taxes paid in Herbivore's first four years of operation were as follows: Taxable Income $62,000 75,000 87,000 89,000 Tax Rates 35% 36 38 Income Taxes Paid $ 21,700 27,000 33,060 32,930 2010 2011 2012 2013 37 Required: 1. Prepare the journal entry to recognize the income tax benefit of the operating loss. Herbivore elects the carryback option. 2. Compute Herbivore's net loss for 2014.

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Operating loss 188000 Deferred tax asset 73320 1... View the full answer