Local Enterprises, Inc. had pre-tax income of $50 million this year. Last year was a bad year for Local with an operating loss of $44 million. Local will use as much of this loss as allowed to offset this year's pre-tax income and carry forward any remaining amount. Calculate the amount of the prior year's operating loss Local will carry forward to next year. Recall that due to the Tax Cuts and Jobs Act, prior years' cumulative operating losses may be used to offset up to 80% of the current years taxable income with any unused operating losses carried forward.
Local Enterprises, Inc. had pre-tax income of $50 million this year. Last year was a bad year for Local with an operating loss of $44 million. Local will use as much of this loss as allowed to offset this year's pre-tax income and carry forward any remaining amount. Calculate the amount of the prior year's operating loss Local will carry forward to next year. Recall that due to the Tax Cuts and Jobs Act, prior years' cumulative operating losses may be used to offset up to 80% of the current years taxable income with any unused operating losses carried forward.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Local Enterprises, Inc. had pre-tax income of $50 million this year. Last year was a bad year for Local with an operating loss of $44 million. Local will use as much of this loss as allowed to offset this year's pre-tax income and carry forward any remaining amount. Calculate the amount of the prior year's operating loss Local will carry forward to next year. Recall that due to the Tax Cuts and Jobs Act, prior years' cumulative operating losses may be used to offset up to 80% of the current years taxable income with any unused operating losses carried forward.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education