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Cabot Company reported a pretax operating loss of $50,000 for financial reporting and tax purposes...

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Accounting

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Cabot Company reported a pretax operating loss of $50,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25% for 2021 and subsequent years. Assume that Cabot operates in an industry for which NOL carryback is allowed and 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: Taxable Tax Taxes income rates paid 2017 $30,000 30% $ 9,000 2018 $35,000 30% $10,500 2019 $42,000 35% $14,700 2020 $40,000 40% $16,000 Required: 1. Prepare the journal entry to record Cabot's income taxes for the year 2021. 2. Compute Cabot's net loss for 2021

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