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  3. wynn farms reported a net operating loss of $160,0

Wynn Farms reported a net operating loss of $160,000 for financial reporting and tax purposes...

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Accounting

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Wynn Farms reported a net operating loss of $160,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynn's first four years of operation were as follows: 2017 2018 2019 2020 Taxable Income $ 75,000 85,000 140,000 75,000 Tax Rates 20% 20 25 40 Income Taxes Paid $15,000 17,000 35,000 30,000 Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. NOL carrybacks are not allowed for most companies, except for property and casualty insurance companies as well as some farm-related businesses. Assume Wynn is one of those businesses. 2. Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss. Journal entry worksheet Record 2021 income tax benefit from operating loss. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal Required 1 Required 2 Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in whole dollars.)

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