Red Lantern Company experienced a net operating loss of $654,000 in 2018. The company reported taxable income of $543,000 in 2016 and $321,000 in 2017. The tax rate for all years is 35%. Assuming the company uses the carryback provisions for the net operating loss, prepare the following for the year of the loss:
a) The necessary journal entry to record the NOL carryback.
b) A partial income statement beginning with the net loss before benefit.

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The Answer of Red Lantern Company experienced a net operating loss of $654,000 in 2018. The company reported taxable income of $543,000 in 2016 and $321,000 in 2017. The tax rate for all years is 35%. Assuming the company uses the carryback provisions for the net operating loss, prepare the following for the year of the loss:
a) The necessary journal entry to record the NOL carryback.
b) A partial income statement beginning with the net loss before benefit.

Red Lantern Company Experienced a Net Operating Loss of $654,000