Cheyenne Corporation had the following tax
information.
Year |
Taxable Income |
Tax Rate |
Taxes Paid |
|||||||
2015 | $306,000 | 34% | $104,040 | |||||||
2016 | 324,000 | 29% | 93,960 | |||||||
2017 | 393,000 | 29% | 113,970 |
In 2018, Cheyenne suffered a net operating loss of $488,000, which
it elected to carry back. The 2018 enacted tax rate is 28%.
Prepare Cheyenne’s entry to record the effect of the loss
carryback. (Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and
enter 0 for the amounts.)
Account Titles and Explanation |
Debit |
Credit |
Answer | |||
Account Title |
Debit | Credit | |
Income Tax Refund Receivable | $ 141,520 | 488000*29% | |
Benefit Due to Loss Carryback | $ 141,520 | ||
(To record income tax benefit for loss carryback) | |||
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