Cabot Company Reported a Pretax Operating Loss of $50,000 for Financial

Cabot Company reported a pretax operating loss of $50,000 for financial reporting and tax purposes in 2018. The enacted tax rate is 40% for 2018 and subsequent years. Assume that Cabot requests a refund of taxes already paid by electing a loss carryback. Taxable income, tax rates, and income taxes paid in Cabot's first four years of operations were as follows: $\begin{array}{rrrc} & \begin{array}{c}\text { Taxable } \\\text { income }\end{array} & \begin{array}{c}\text { Tax } \\\text { rates }\end{array} & \begin{array}{c}\text { Taxes } \\\text { paid }\end{array} \\2014 & \$ 30,000& 30 \% & \$ 9,000 \\2015 & 35,000 & 30 \% & 10,50 \\2016 & 42,00 0 & 35 \% & 14,70 \\2017 & 40,000 & 40 \% & 16,00\end{array}$ Required:
1.) Prepare the journal entry to record Cabot's income taxes for the year 2018. Show well-labeled computations.
2.) Compute Cabot's net loss for 2018.