Wheaton Inc. reported the following results for its first three years of operations:   2019 Income (before income taxes) $ 40,000 2020 Loss (before income taxes) (300,000) 2021 Income (before income taxes) 400,000   There were no permanent or reversible differences during these three years. Assume an income tax rate of 30% for 2019 and 2020, and 40% for 2021, and that any tax loss carryforward  is more  likely than not to be realized. If Wheaton elects to use the carryback provisions, what after tax net income (loss) is reported for 2020?      Select one: a. $(300,000). b. $(196,000). c. $(184,000). d. $0. e. none of the above.

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.