Tax rate % of current period income eligible for NOLS Year Income statement GAAP current period income / (loss) GAAP tax expense/ (benefit) (current period income x tax rate) Memo: Cash taxes due (taxable current period income x tax rate) Balance sheet Deferred tax assets-Beginning of period Plus: Change in deferred tax assets Equals: Deferred tax assets-End of period (NOLS remaining x tax rate) Memo: NOLS used up in period (80% x current period income) Memo: Taxable current period income (current period not offset by NOLs) Memo: NOLS remaining (Prior period NOLS less NOLS used in current period O $80 O $100 O $200 O $0 30% 80% 2019 (600) 300 0 2020 2021 00 200 2022 150
Tax rate % of current period income eligible for NOLS Year Income statement GAAP current period income / (loss) GAAP tax expense/ (benefit) (current period income x tax rate) Memo: Cash taxes due (taxable current period income x tax rate) Balance sheet Deferred tax assets-Beginning of period Plus: Change in deferred tax assets Equals: Deferred tax assets-End of period (NOLS remaining x tax rate) Memo: NOLS used up in period (80% x current period income) Memo: Taxable current period income (current period not offset by NOLs) Memo: NOLS remaining (Prior period NOLS less NOLS used in current period O $80 O $100 O $200 O $0 30% 80% 2019 (600) 300 0 2020 2021 00 200 2022 150
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Tax rate
% of current period income eligible for NOLS
Year
Income statement
GAAP current period income / (loss)
GAAP tax expense/ (benefit) (current period income x tax rate)
Memo: Cash taxes due (taxable current period income x tax rate)
Balance sheet
Deferred tax assets - Beginning of period
Plus: Change in deferred tax assets
Equals: Deferred tax assets-End of period (NOLS remaining x tax rate)
use the fact pattern below. What is the remaining NOL balance in 20211
M
pert
income)
NOLS used up period (80 %:
Memo: Taxable current period income (current period not offset by NOLs)
Memo: NOLS remaining (Prior period NOLS less NOLS used in current period
O $80
O $100
O $200
O $0
30%
80%
2019
(600)
0
OO
0
2020 2021
300
200
2022
150
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