Wynn Farms reported a net operating loss of $100,000 for financial reporting and tax purposes in...

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Wynn Farms reported a net operating loss of $100,000 for financial reporting and tax purposes in 2021. The enacted tax rate i

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Solution 1:

Net Operating loss carryback	Amount	Rate of Tax	Tax	Recorded as
Carried back - 2017	$0.0	30%	$0.00
Carried back - 2018	$0.0	30%	$0.00
Carried back - 2019	$80,000.0	25%	$20,000.00
Carried back - 2020	$20,000.0	30%	$6,000.00

Total Carryback	$100,000.0		$26,000.00	Income tax benefit

Adjusting Journal Entries - Wynn Farm
Event	Particulars	Debit	Credit
1	Receivables - Income Tax Refund	$26,000.00
	To Income tax expense		$26,000.00
	(Being income tax benefit due to loss carryback recorded)

solution 2:

Income Statement - Wynn Farm For the year ended December 31, 2021
Particulars	Amount
Operating loss before income tax	-$100,000.00
Income tax benefit:
Tax refund from loss carryback	$26,000.00

Net Income (Loss)	-$74,000.00

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