asset. Taxable income for 2016 is $180 million and the tax rate is 40%.1. Prepare the journal entry(s) to record Payne’s income taxes for 2016, assuming it is more likely thadeferred tax asset will be realized.2. Prepare the journal entry(s) to record Payne’s income taxes for 2016, assuming it is more likely thafourth of the deferred tax asset will ultimately be realized.
E 16–22Net operating loss carryback and carryforwardRequired:LO16–7(This exercise is based on the situation described in E 16–21, modified to include a carryforwacarryback.) Wynn Sheet Metal reported a net operating loss of $160,000 for financial reporting and tax purpenacted tax rate is 40%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years ofollows:1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Wynn electsoption.2. Show the lower portion of the 2016 income statement that reports the income tax benefit of the ne
ard in addition to aposes in 2016. Theof operation were ass the carry-backet operating loss.