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Operating income and tax rates for M.J. Company's first three years of operations were as follows: Income Enacted tax rate 2024 $390000 25% 2025 ($990000) 20% 2026 $1670000 30% Assuming that M.J. Company opts only to carryforward its 2025 NOL, what is the amount of deferred tax asset or liability that M.J. Company would report on its December 31, 2025 balance sheet?

Operating income and tax rates for M.J. Company's first three years of operations were as follows: Income Enacted tax rate 2024 $390000 25% 2025 ($990000) 20% 2026 $1670000 30% Assuming that M.J. Company opts only to carryforward its 2025 NOL, what is the amount of deferred tax asset or liability that M.J. Company would report on its December 31, 2025 balance sheet?

FINANCIAL ACCOUNTING
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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Operating income and tax rates for M.J. Company's first three years of operations were as follows: Income Enacted tax rate 2024 $390000 25% 2025 ($990000) 20% 2026 $1670000 30% Assuming that M.J. Company opts only to carryforward its 2025 NOL, what is the amount of deferred tax asset or liability that M.J. Company would report on its December 31, 2025 balance sheet?
Transcribed Image Text:Operating income and tax rates for M.J. Company's first three years of operations were as follows: Income Enacted tax rate 2024 $390000 25% 2025 ($990000) 20% 2026 $1670000 30% Assuming that M.J. Company opts only to carryforward its 2025 NOL, what is the amount of deferred tax asset or liability that M.J. Company would report on its December 31, 2025 balance sheet?
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