Recording Net Operating Loss CarrybackDuring Year 4, Lamb Inc. suffered a tax loss of $-360,000. Lamb qualifies for a two-year loss carryback option for tax purposes, using the earliest yearfirst and with no income restrictions. Taxable income for the last three years (listed in chronological order) follows: Year 1: $324,000; Year 2: $288,000;and Year 3: $108,000. 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 onDecember 31 of Year 4.DateDec. 31, Year 4Account NameTo record net operating loss carrybackDr.0Cr.0x

To record the net operating loss (NOL) carryback for Lamb Inc., we first need to apply the $360,000…

Answered: Recording Net Operating Loss Carryback…

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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Wynn Farms reported a net operating loss of $160,000 for financial reporting and tax purposes in 2024. 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 Income Tax Rates Income Taxes Paid 2020 $ 75,000 20% $ 15,000 2021 85,000 20 17,000 2022 140,000 25 35,000 2023 75,000 40 30,000 Required: 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. Show the lower portion of the 2024 income statement that reports the income tax benefit of the net operating loss.
Recording Net Operating Loss Carryback During Year 4, Lamb Inc. suffered a tax loss of $(360,000). 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: $324,000; Year 2: $288,000; and Year 3: $108,000. 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 Dr. Cr. 196,200 0 x 0 196,200 ×
Wynn Farms reported a net operating loss of $180,000 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: 2017 2018 Taxable Tax Income Rates $ 80,000 20% 90,000 20 Income Taxes Paid $16,000 18,000 2019 160,000 25 2020 80,000 35 40,000 28,000 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. 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…
Before considering a tax loss carryforward of $80 million, Aero Corporation reported $200 million of pretax accounting and taxable income in the current year. The income tax rate for all previous years was 40%. On January 1 of the current year a new tax law was enacted, reducing the rate to 35% effective immediately. Aero's income tax payable for the current year would be: Select one: a. $48 million. b. $28 million. c. $36 million. d. $42 million. e. $80 million.
Dix Company reported operating income (loss) before income tax in its first three years of operations as follows: 20X1 $ 100,000 20X2 (200,000 ) 20X3 240,000 Dix had no permanent or temporary differences between book income and taxable income in these years. Assume a 21% tax rate for all years, and assume there is no valuation allowance. Required: What amount of taxes does Dix pay related to its 20X3 tax return?
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A company experiences a net operating loss of $80,000 in year 1. In year 2, the company reports taxable income of $60,000. How much of the taxable income will the company offset in year 2 by applying the net operating loss from year 1? O $60,000 O $48,000 O $80,000 O Cannot be determined because the tax rate is not given.
Candyland Property and Casualty Insurance Corporation reported a net operating loss of $220,000 for financial reporting and tax purposes in 2019. The enacted tax rate is 25%. Taxable income and tax rates in Candyland's first two years of operation were as follows: 2017 $40,000 30% 2018 $100,000 25% Assuming NOL carryback is allowed for companies up to 2 years, the amount of net loss reported on the income statement for the year ended December 31, 2019 would be: O $154,000 O $158,000 O $163,000 O $165,000
Livia Company’s pretax income was $72,000. To compute taxable income, the following information is provided: Excess of estimated bad debts over write-offs $26,000 Penalty for late filing of income taxes 21,000 Excess of tax depreciation over accounting depreciation 36,000 Tax rate 20% What is the current portion of income tax? $12,400 $6200 $16,600 $22,600
am. 134.

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