Determine taxable income in each of the following independent cases. In all cases, the company was very profitable in all years prior to 2017 and it had retained earnings of $1,000,000 at the end of 2017.   Required: In 2019, Company C has taxable income of $36,750 prior to consideration of any net operating loss. In 2018, the company incurred a net operating loss of $31,600. Determine 2019 taxable income. In 2019, Company D has taxable income of $36,750 prior to consideration of any net operating loss. In 2017, the company incurred a net operating loss of $5,250. It elected to waive the carryback period. In 2018, the company incurred a net operating loss of $42,000. Determine 2019 taxable income.

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.