Response to the following problem:
Rode Inc. incurred a net operating loss of $500,000 in 2014. Combined income for 2012 and 2013 was $350,000. The tax rate for all years is 40%. Rode elects the carryback option.
Prepare the journal entries to record the benefits of the loss carryback and the loss carry forward. Rode expects to return to profitability in 2015.