Coronado Inc. incurred a net operating loss of $453,000 in 2017. Combined income

Question

Coronado Inc. incurred a net operating loss of $453,000 in 2017. Combined income for 2015 and 2016 was $343,000. The tax rate for all years is 30%. Coronado elects the carryback option. Prepare the journal entries to record the benefits of the loss carryback and the loss carryforward. Coronado expects to return to profitability in 2018. (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

(To record carryback.)

(To record carryforward.

Account Titles and Explanation

Debit

Credit

(To record carryback.)

(To record carryforward.

Explanation / Answer

Income tax refund receivable 102900 =343000*30%        Benefit due to loss caryback 102900 Deferred tax asset 33000 =(453000-343000)*30%        Benefit due to loss carryforward 33000

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