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Wynn Sheet Metal reported an operating loss of $210,000 for financial reporting and tax purposes in 2016. The enacted tax rate is 40%. Taxable income, tax rates, and income taxes paid in Wynns first four years of operation were as follows:

	Taxable Income		Tax Rates		Income Taxes Paid
2012	$	85,000	30	%	$	25,500
2013		95,000	30			28,500
2014		105,000	40			42,000
2015		85,000	45			38,250

Required:

1.

Complete the following table given below and prepare the journal entry to recognize the income tax benefit of the operating loss. Wynn elects the carryback option. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands. Leave no cell blank, enter "0" wherever applicable.) Operating loss carryback Rate % Tax $ Recorded as: Carried back - 2012 x = Carried back - 2013 x = Carried back - 2014 x = Carried back - 2015 x = Total carryback Operating loss carryforward Carried forward x =

2.	Show the lower portion of the 2016 income statement that reports the income tax benefit of the operating loss. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.) Operating loss before income taxes Income tax benefit: Future tax savings from loss carryforward Tax refund from loss carryback Net loss

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