Answer and Explanation:
1.
Net Operating loss carryback Amount Rate of Tax Tax Recorded as
Carried back - 2014 $0.0 30% $0.0
Carried back - 2015 $0.0 30% $0.0
Carried back - 2016 $42,000 35% $14,700.0
Carried back - 2017 $8,000.0 40% $3,200.0
Total Carryback $50,000.0 $17,900.0
Journal Entries - Cabot Company
Date Particulars Debit Credit
31-Dec-18 Receivables - Income Tax Refund $17,900
To Income tax benefit - Net Operating Loss $17,900
2. Cabot's net loss for 2018 = -$50,000 + $17,900
= ($32,100)
