Violet Corporation reported a loss in 2015 of $650,000. The company reported taxable income of $195,000 in 2013 and $215,000 in 2014. It has no permanent or temporary differences and its tax rate is 30%.

Refer to Violet Corporation. What is the necessary journal entry for 2015?

A)
Income Tax Refund Receivable
195,000

Income Tax Payable

123,000
Deferred Tax Asset

72,000

B)
Income Tax Refund Receivable
123,000

Deferred Tax Asset
72,000

Income Tax Benefit

195,000

C)
Income Tax Refund Receivable
123,000

Deferred Tax Asset

123,000

D)
Deferred Tax Asset
195,000

Income Tax Benefit

195,000

Answer: B
Explanation: B) Refund (195,000 + 215,000) × 30%. Benefit 650,000 × 30%