Problem 16-11(Algo) Net operating loss carryforward; multiple differences; valuation allowances; financial statement effects [LO16-3,16-4,16-5,16-7] Fore Farms reported a pretax operating loss of \(\$ 168\) million for financial reporting purposes in 2027. Contributing to the loss were (a) a penalty of \$4 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2027 and (b) an estimated loss of \(\$ 20\) million from accruing a loss contingency. The loss will be tax deductible when paid in 2028. The enacted tax rate is \(25\%\). There were no temporary differences at the beginning of the year and none originating in 2027 other than those described above. Assume that in 2027, Fore does not believe it is more likely than not that future taxable income will be sufficient to benefit from any future deductible amounts arising from deferred tax assets. Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2027.2. What is the net operating loss reported in 2027 income statement? 3. Prepare the journal entry to record income taxes in 2028 assuming pretax accounting income is \(\$ 198\) million. No additional temporary differences originate in 2028. Assume the weight of available evidence during 2028 suggests that it now is "more likely than not" that future taxable income will be sufficient to benefit from any future deductible amounts arising from the 2027 net operating loss carryforward that remain after 2028.4. Show the lower portion of the 2028 income statement that reports pretax accounting income and any tax benefit or expense. Complete this question by entering your answers in the tabs below. Required 1 Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2027. Note: If no entry is required for a transaction or 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).