Wynn Sheet Metal reported a net operating loss of $100,000 for financial reporting and tax purposes in 2018. The enacted tax rate is 40%. Taxable income, tax rates, and income taxes paid in Wynn's first four years of operation were as follows:

Taxable Income Tax Rates Income Taxes Paid

2014.................$60,000...................30%....................$18,000

2015..................70,000....................30.......................21,000

2016..................80,000....................40.......................32,000

2017..................60,000....................45.......................27,000

Required:

1. Prepare the journal entry to recognize the income tax benefit of the net 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 net operating loss.