Use the information for Rode SA given in BE19.13. Assume that it is probable that the entire net operating loss carryforward will not be realized in future years. Prepare the journal entry(ies) necessary at the end of 2019.
Rode SA incurred a net operating loss of €500,000 in 2019. Combined income for 2017 and 2018 was €350,000. The tax rate for all years is 40%. Rode elects the carryback option. Prepare the journal entries to record the benefits of the loss carryback and the loss carryforward, assuming sufficient taxable income in the future.