Recording Net Operating Loss Carryback During Year 4, Lamb Inc. suffered a tax loss of $-100,000. Lamb qualifies for a two-year loss carryback option for tax purposes, using the earliest year first and with no income restrictions. Taxable income for the last three years (listed in chronological order) follows: Year 1: $90,000; Year 2: $80,000; and Year 3: $30,000. The tax rate is 40% for Year 3 and Year 4, and 25% for Year 1 and Year 2. Prepare Lamb's entry for the loss carryback on December 31 of Year 4. Account Name Dr. Date ec. 31, Year 4 Deferred Tax Asset Income Tax Expense To record net operating loss carryback 25,000 0 Cr. 0x 25,000 *

Recording Net Operating Loss Carryback During Year 4, Lamb Inc. suffered a tax loss of $-100,000. Lamb qualifies for a two-year loss carryback option for tax purposes, using the earliest year first and with no income restrictions. Taxable income for the last three years (listed in chronological order) follows: Year 1: $90,000; Year 2: $80,000; and Year 3: $30,000. The tax rate is 40% for Year 3 and Year 4, and 25% for Year 1 and Year 2. Prepare Lamb's entry for the loss carryback on December 31 of Year 4. Account Name Dr. Date ec. 31, Year 4 Deferred Tax Asset Income Tax Expense To record net operating loss carryback 25,000 0 Cr. 0x 25,000 *

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 4BCRQ

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The Bookbinder Company had 500,000 cumulative operating losses prior to the beginning of last year. It had 100,000 in pre-tax earnings last year before using the past operating losses and has 300,000 in the current year before using any past operating losses. It projects 350,000 pre-tax earnings next year. a. How much taxable income was there last year? How much, if any, cumulative losses remained at the end of the last year? b. What is the taxable income in the current year? How much, if any, cumulative losses remain at the end of the current year? c. What is the projected taxable income for next year? How much, if any, cumulative losses are projected to remain at the end of next year?
In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
Recording Net Operating Loss Carryback During Year 4, Lamb Inc. suffered a tax loss of $(200,000). Lamb qualifies for a two-year loss carryback option for tax purposes, using the earliest year first and with no income restrictions. Taxable income for the last three years (listed in chronological order) follows: Year 1: $180,000; Year 2: $160,000; and Year 3: $60,000. The tax rate is 40% for Year 3 and Year 4, and 25% for Year 1 and Year 2. Prepare Lamb's entry for the loss carryback on December 31 of Year 4. Date Account Name Dec. 31, Year 4 Income Tax Refund Receivable Income Tax Expense To record net operating loss carryback Check + Dr. 116,000 0 Cr. 0x 116,000 *
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am. 134.
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