Question - Russell inc incurred a net operating loss of 1 million in 2017. Combined income for 2015 and 2016 was 700,000. The tax rate for all years is 40%. Russell elects the loss carryback option. Russell expect to be profitable in 2018 and thereafter.
1. Prepare journal entries at the end of 2017 to record the benefits of the loss carryback and the loss carryforward.
2. Assume that it is likely that the net operating loss carryfoward wont be realized in the future years. prepare journal entries at the end of the 2017.