At Carla Vista Co., events and transactions during 2020 included the following. The tax rate for all items is 20%. (1) Depreciation for 2018 was found to be understated by $120500. (2) A strike by the employees of a supplier resulted in a loss of $100800. (3) The inventory at December 31, 2018 was overstated by $169800. (4) A disposal of a component of the business resulted in a $1985000 loss. The effect of these events and transactions on 2020 net income net of tax would be

At Carla Vista Co., events and transactions during 2020 included the following. The tax rate for all items is 20%. (1) Depreciation for 2018 was found to be understated by $120500. (2) A strike by the employees of a supplier resulted in a loss of $100800. (3) The inventory at December 31, 2018 was overstated by $169800. (4) A disposal of a component of the business resulted in a $1985000 loss. The effect of these events and transactions on 2020 net income net of tax would be

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Northwestern Ocean Lapidary Inc. has been in business since 2015. However, during the 2020 pandemic, the company suffered a large net operating loss. See below. Despite a bad 2020, the company expect to turn a profit in 2021 and in subsequent years. Below you will see the actual taxable income from 2018 to 2021. You will also see the company's expected taxable income from 2022 to 2025. Under current tax laws the company was unable to carry back the NOL in 2020. However, the company applied the NOL CF to offset all taxable income in 2021. Taxable Income 2018 2$ 144,000 2019 $ 252,000 2020 $ (876,000) 2021 $ 72,000 2022* 2$ 204,000 2023* $ 264,000 2024* $ 312,000 2025* 2$ 420,000 *Expected Existing and future enacted tax rates are as follows: 21% in 2018 to 2021, 25% in 2022 and 2023, 28% in 2024, and 32% in 2025 and all years thereafter. What is the DTA the company will report on its 2021 balance sheet that corresponds to the NOL Carry Foward? 227,160 353,880 212,040 212,040 None of the…
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In 2021, Heartfin Farms reported a pretax accounting loss of $196 million. During the year, the company paid a fee of $4 million due to a fine from the Food and Drug Administration. The company accrued an expense for estimated paid future absences of $30 million relating to the company’s employee vacation program. The amounts owed will be paid equally over the next two years ($15 million in 2022 and $15 million in 2023). The enacted tax rate is 25%. There were no temporary differences at the beginning of the year and none originating in 2021 other than those described above. In the prior two years, Hinton Farms reported taxable income of $64 million in 2020 and $88 million in 2019. What is Heartfin Farms' net operating loss carryforward in 2021? A. $10 million B. $162 million C. $30 million D. $152 million
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