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

question 22

Essay

Red Lantern Company experienced a net operating loss of $654,000 in 2015.The company reported taxable income of $543,000 in 2013 and $321,000 in 2014.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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Definitions:

Slack Variables

Additional variables introduced into linear programming problems to convert inequality constraints into equality constraints.

Nonnegative

A term describing numbers that are greater than or equal to zero, excluding negative numbers.

A-type Steel Sheets

A classification of steel sheets, this term may refer to a specific quality, grade, or characteristic defined by a manufacturing or industry standard (assuming hypothetical; otherwise NO).

Solver

An optimization tool used in computational software that finds the maximum or minimum value of a function under given constraints.