Below are the taxable profits and losses for the past few years along with the tax rates on income reported for Olive Company. Income Tax Rate 2016 $100,000 35% 2017 $20,000 35% 2018 $100,000 35% 2019 ($250,000) 20% 2020 $85,000 20% 2021 unknown 20% Olive elects to use both carry back and carry forward procedures with no valuation allowance and strongly anticipates future profits to recover losses. Record the tax effect of the above for 2019 Show the income tax section and loss section of the income statement for 2019 Record the tax effect of the above for 2020

Below are the taxable profits and losses for the past few years along with the tax rates on income reported for Olive Company. Income Tax Rate 2016 $100,000 35% 2017 $20,000 35% 2018 $100,000 35% 2019 ($250,000) 20% 2020 $85,000 20% 2021 unknown 20% Olive elects to use both carry back and carry forward procedures with no valuation allowance and strongly anticipates future profits to recover losses. Record the tax effect of the above for 2019 Show the income tax section and loss section of the income statement for 2019 Record the tax effect of the above for 2020

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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Candyland Property and Casualty Insurance Corporation reported a net operating loss of $220,000 for financial reporting and tax purposes in 2019. The enacted tax rate is 25%. Taxable income and tax rates in Candyland's first two years of operation were as follows: 2017 $40,000 30% 2018 $100,000 25% Assuming NOL carryback is allowed for companies up to 2 years, the amount of net loss reported on the income statement for the year ended December 31, 2019 would be: O $154,000 O $158,000 O $163,000 O $165,000
a. b Below are the taxable profits and losses for the past few years along with the tax rates on income reported for Olive Company. 2025 2026 2027 Income ($275,000) $70,000 $260,000 Tax Rate 20% 20% 20% Olive elects to use the carry forward procedures with no valuation allowance and strongly anticipates future profits to recover losses. Record the tax effect of the above for 2025 Show the income tax section and loss section of the income statement for 2025
Wynn Farms reported a net operating loss of $180,000 for financial reporting and tax purposes in 2024. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows: Taxable Income Tax Rates Income Taxes Paid 2020 $ 80,000 20% $ 16,000 2021 90,000 20 18,000 2022 160,000 25 40,000 2023 80,000 35 28,000 Required: Prepare the journal entry to recognize the income tax benefit of the net operating loss. NOL carrybacks are not allowed for most companies, except for property and casualty insurance companies as well as some farm-related businesses. Assume Wynn is one of those businesses. Show the lower portion of the 2024 income statement that reports the income tax benefit of the net operating loss.
Blossom Corporation reported the following results for its first three years of operation: 2020 income (before income taxes) $280000 2021 loss (before income taxes) (2500000 ) 2022 income (before income taxes) 2800000 There were no permanent or temporary differences during these three years. Assume a corporate tax rate of 20% for 2020 and 2021, and 30% for 2022.Assuming that Blossom elects to use the carryback provision, what income (loss) is reported in 2021? (Assume that any deferred tax asset recognized is more likely than not to be realized.)
Lewes Company appropriately uses the installment sales method for tax purposes and the accrual method for revenue recognition for accounting purposes. Pertinent data at December 31, 2016, the close of the first year of operations, are as follows: Revenue Recognized Revenue Recognized Customer for Accounting Purposes for Tax Purposes Lowe's Builders $200,000 $100,000 Top Down Plumbing 500,000 350,000 Glass Plus Windows 600,000 350,000 Lewes's tax rate is 30%. What amount should be included in the deferred tax account at December 31, 2016 for these installment sales?
Assume that The Bell Company operates in an industry for which NOL carryback is allowed. The Bell Company had the following operating results: Year Income (loss) Tax rate Income tax 2018 40,000 25 % 10,000 2019 40,000 25 % 10,000 2020 50,000 30 % 15,000 2021 (130,000 ) 30 % 0 What is the Deferred tax Asset in 2021?
Norfolk Southern operates in an industry for which NOL carryback is not allowed, and had the following pretax income (loss) over its first three years of operations 2019 $ 1,200,000 2020 (900,000 ) 2021 1,500,000 For each year there were no deferred income taxes and the tax rate was 25%. No valuation account was deemed necessary for the deferred tax asset as of December 31, 2020. What was Norfolk Southern's income tax expense in 2021?
Blossom Corporation had the following tax information: Year Taxable Income Tax Rate Taxes Paid 2020 $389,000 31% $120,590 2021 311,000 30% 93,300 2022 398,100 30% 119,430 In 2023, Blossom suffered a net operating loss of $551,000, which it decided to carry back. The 2023 enacted tax rate is 25%. Prepare Blossom's entry to record the effect of the loss carryback. (List debit entry before credit entry. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Income Tax Receivable 165300 165300
Matador Company is preparing its 2022 financial statements. Matador's bookkeeper has determined Income from Continuing Operations (ICO) but is not certain this number is accurate. Matador has a corporate tax rate of 30%. Use the following information to determine the adjustments, if any, to ICO. (Hint: if you are adjusting ICO, should the adjustments be pre-tax or net of tax?) If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to ICO; enter 0. Put your answers in the provided boxes. 1) During 2022, Matador declared preferred dividends of $70,000, paid $90,000 for dividends, and received $135,000 for dividends on available-for-sale equity securities. The bookkeeper did not include any of these when calculating ICO. Determine the adjustment to ICO. Matador has a corporate tax rate of 30%. 2) Over the past 4 years, Matador has…