What book-tax differences in year 1 and year 2 associated with its capital gains and losses would ABD Incorporated repo in the following alternative scenarios? Identify each book-tax difference as favorable or unfavorable and as permanent o temporary. Note: Leave no answer blank. Enter zero if applicable and select "Not applicable" if no effect. "roblem 05-42 Part f (Static) Answer for year 7 only. Capital gains Capital losses Year 7 Book-tax Difference Year 1 50 10,000 Favorable or Unfavorable Years 2-6 50 0 Year 7 $ 15,000 Temporary or Permanent
What book-tax differences in year 1 and year 2 associated with its capital gains and losses would ABD Incorporated repo in the following alternative scenarios? Identify each book-tax difference as favorable or unfavorable and as permanent o temporary. Note: Leave no answer blank. Enter zero if applicable and select "Not applicable" if no effect. "roblem 05-42 Part f (Static) Answer for year 7 only. Capital gains Capital losses Year 7 Book-tax Difference Year 1 50 10,000 Favorable or Unfavorable Years 2-6 50 0 Year 7 $ 15,000 Temporary or Permanent
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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
Transcribed Image Text:What book-tax differences in year 1 and year 2 associated with its capital gains and losses would ABD Incorporated report
in the following alternative scenarios? Identify each book-tax difference as favorable or unfavorable and as permanent or
temporary.
Note: Leave no answer blank. Enter zero if applicable and select "Not applicable" if no effect.
Problem 05-42 Part f (Static)
1. Answer for year 7 only.
Capital gains
Capital losses
Year 7
Book-tax
Difference
Year 1
50
10,000
Favorable or
Unfavorable
Years 26
$0
0
Year 7.
$ 15,000
Temporary or
Permanent
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