Wynn elects the carry back option

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Wynn Sheet Metal reported an operating loss of $160,000 for financial reporting and tax purposes in 2011. 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:

Required:

1. Prepare the journal entry to recognize the income tax benefit of the operating loss. Wynn elects the carry back option.

2. Show the lower portion of the 2011 income statement that reports the income tax benefit of the operating loss.

Reference no: EM131003637

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