During its first year of operations, Nile.com reported an operating loss of $15 million for financial reporting and tax purposes. The enacted tax rate is 40%. Prepare the journal entry to recognize the income tax benefit of the operating loss.(general account)

During its first year of operations, Nile.com reported an operating loss of $15 million for financial reporting and tax purposes. The enacted tax rate is 40%. Prepare the journal entry to recognize the income tax benefit of the operating loss.(general account)

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 51P

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Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Refer to the information for Juroe Company on the previous page. Also, assume that Juroes total assets at the beginning of last year equaled 17,350,000 and that the tax rate applicable to Juroe is 40%. Required: Note: Round answers to two decimal places. 1. Calculate the average total assets. 2. Calculate the return on assets.
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During its first year of operations, Nile.com reported a net operating loss of $15 million for financial reporting and tax purposes. The enacted tax rate is 40%. Prepare the journal entry to recognize the income tax benefit of the net operating loss.
During 2021, its first year of operations, Sherrod, Inc. reported a net operating loss of $5 million for financial reporting and tax purposes. The enacted tax rate is 25%. Prepare the journal entry to recognize the income tax benefit of the net operating loss.
AirParts Corporation reported a net operating loss of $25 million for financial reporting and tax purposes. Taxable income last year and the previous year, respectively, was $20 million and $15 million. The enacted tax rate each year is 40%. Prepare the journal entry to recognize the income tax benefit of the net operating loss. AirParts elects the carryback option.
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Wynn Farms reported a net operating loss of $144,000 for financial reporting and tax purposes in 2021. 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 Tax Income 2017 $ 71,000 20% 2018 81,000 20 2019 124,000 25 2020 71,000 40 Rates Income Taxes Paid Required: 1. 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. 2. Show the lower portion of the 2021 Income statement that reports the income tax benefit of the net operating loss. Complete this question by entering your answers in the tabs below. View transaction list Required 1 Required 2 Prepare the journal entry to recognize the income tax benefit of the net operating loss. NOL carrybacks are not allowed for most companies,…
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