Net Operating Loss Carryforward The net operating loss is considered as negative taxable income. When the tax-deductible expenses exceed the taxable revenues, the net operating loss is carry forwarded as it helps in getting deductions in future taxable amount. Net Operating Loss Carryback The net operating loss is considered as negative taxable income. It can be used in other fiscal year to offset the taxable income. The net operating loss carry back helps the companies to get reduction in the taxes from the past profitable years, in the form of tax refund, for the tax paid on the profit earned on those years. Temporary Difference Temporary difference refers to the difference of one income recognized by the tax rules and accounting rules of a company in different periods. Consequently, the difference between the amount of assets and liabilities reported in the financial reports and the amount of assets and liabilities as per the company’s tax records, is known as temporary difference. Multiple Temporary Difference It is very unlikely to have a single temporary difference in any company. In that case, the same concept of temporary difference will be applicable for multiple temporary difference. In case of multiple temporary difference, we have to categorize all temporary difference into future taxable amount and future deductible amounts. The total amount of future taxable amounts multiplied by future tax rate will generate deferred tax liability and total amount of future deductible amount multiplied by future tax rate will generate deferred tax asset . To prepare: The journal entry to recognize the income tax benefit of the net operating loss in 2018 through carryback option.

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Answer 1

Question

Chapter 16, Problem 16.10P

1.

To determine

Net Operating Loss Carryforward

The net operating loss is considered as negative taxable income. When the tax-deductible expenses exceed the taxable revenues, the net operating loss is carry forwarded as it helps in getting deductions in future taxable amount.

Net Operating Loss Carryback

The net operating loss is considered as negative taxable income. It can be used in other fiscal year to offset the taxable income. The net operating loss carry back helps the companies to get reduction in the taxes from the past profitable years, in the form of tax refund, for the tax paid on the profit earned on those years.

Temporary Difference

Temporary difference refers to the difference of one income recognized by the tax rules and accounting rules of a company in different periods. Consequently, the difference between the amount of assets and liabilities reported in the financial reports and the amount of assets and liabilities as per the company’s tax records, is known as temporary difference.

Multiple Temporary Difference

It is very unlikely to have a single temporary difference in any company. In that case, the same concept of temporary difference will be applicable for multiple temporary difference. In case of multiple temporary difference, we have to categorize all temporary difference into future taxable amount and future deductible amounts. The total amount of future taxable amounts multiplied by future tax rate will generate deferred tax liability and total amount of future deductible amount multiplied by future tax rate will generate deferred tax asset.

To prepare: The journal entry to recognize the income tax benefit of the net operating loss in 2018 through carryback option.

2.

To determine

To show: The lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss.

3.

To determine

To prepare: The journal entry to record the income taxes in 2019 assuming pre-tax accounting income is $60 million.

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cesi Required information [The following information applies to the questions displayed below] On July 23 of the current year, Dakota Mining Company pays $8,595,840 for land estimated to contain 9,768,000 tons of recoverable ore. It installs and pays for machinery costing $1,074,480 on July 25. The company removes and sells 502,500 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required: Prepare entries to record the following. (a) The purchase of the land. (b) The cost and installation of machinery. (c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined. (d) The first five months' depreciation on the machinery. Complete this question by entering your answers in the tabs below. Required A Required B Required C1 Required C2 Required D1 Required D2

During October, the first month of the fiscal year, sales totaled $750,000, and the cost of merchandise available for sale totaled $680,000. Estimate the cost of the merchandise inventory as of October 31, based on an estimated gross profit rate of 35%. Answer

general accounting

Answer 2

Question

Chapter 16, Problem 16.10P

1.

To determine

Net Operating Loss Carryforward

The net operating loss is considered as negative taxable income. When the tax-deductible expenses exceed the taxable revenues, the net operating loss is carry forwarded as it helps in getting deductions in future taxable amount.

Net Operating Loss Carryback

The net operating loss is considered as negative taxable income. It can be used in other fiscal year to offset the taxable income. The net operating loss carry back helps the companies to get reduction in the taxes from the past profitable years, in the form of tax refund, for the tax paid on the profit earned on those years.

Temporary Difference

Temporary difference refers to the difference of one income recognized by the tax rules and accounting rules of a company in different periods. Consequently, the difference between the amount of assets and liabilities reported in the financial reports and the amount of assets and liabilities as per the company’s tax records, is known as temporary difference.

Multiple Temporary Difference

It is very unlikely to have a single temporary difference in any company. In that case, the same concept of temporary difference will be applicable for multiple temporary difference. In case of multiple temporary difference, we have to categorize all temporary difference into future taxable amount and future deductible amounts. The total amount of future taxable amounts multiplied by future tax rate will generate deferred tax liability and total amount of future deductible amount multiplied by future tax rate will generate deferred tax asset.

To prepare: The journal entry to recognize the income tax benefit of the net operating loss in 2018 through carryback option.

2.

To determine

To show: The lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss.

3.

To determine

To prepare: The journal entry to record the income taxes in 2019 assuming pre-tax accounting income is $60 million.

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Answer 3

Question

Chapter 16, Problem 16.10P

1.

To determine

Net Operating Loss Carryforward

The net operating loss is considered as negative taxable income. When the tax-deductible expenses exceed the taxable revenues, the net operating loss is carry forwarded as it helps in getting deductions in future taxable amount.

Net Operating Loss Carryback

The net operating loss is considered as negative taxable income. It can be used in other fiscal year to offset the taxable income. The net operating loss carry back helps the companies to get reduction in the taxes from the past profitable years, in the form of tax refund, for the tax paid on the profit earned on those years.

Temporary Difference

Temporary difference refers to the difference of one income recognized by the tax rules and accounting rules of a company in different periods. Consequently, the difference between the amount of assets and liabilities reported in the financial reports and the amount of assets and liabilities as per the company’s tax records, is known as temporary difference.

Multiple Temporary Difference

It is very unlikely to have a single temporary difference in any company. In that case, the same concept of temporary difference will be applicable for multiple temporary difference. In case of multiple temporary difference, we have to categorize all temporary difference into future taxable amount and future deductible amounts. The total amount of future taxable amounts multiplied by future tax rate will generate deferred tax liability and total amount of future deductible amount multiplied by future tax rate will generate deferred tax asset.

To prepare: The journal entry to recognize the income tax benefit of the net operating loss in 2018 through carryback option.

2.

To determine

To show: The lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss.

3.

To determine

To prepare: The journal entry to record the income taxes in 2019 assuming pre-tax accounting income is $60 million.

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Answer 4

Question

Chapter 16, Problem 16.10P

1.

To determine

Net Operating Loss Carryforward

The net operating loss is considered as negative taxable income. When the tax-deductible expenses exceed the taxable revenues, the net operating loss is carry forwarded as it helps in getting deductions in future taxable amount.

Net Operating Loss Carryback

The net operating loss is considered as negative taxable income. It can be used in other fiscal year to offset the taxable income. The net operating loss carry back helps the companies to get reduction in the taxes from the past profitable years, in the form of tax refund, for the tax paid on the profit earned on those years.

Temporary Difference

Temporary difference refers to the difference of one income recognized by the tax rules and accounting rules of a company in different periods. Consequently, the difference between the amount of assets and liabilities reported in the financial reports and the amount of assets and liabilities as per the company’s tax records, is known as temporary difference.

Multiple Temporary Difference

It is very unlikely to have a single temporary difference in any company. In that case, the same concept of temporary difference will be applicable for multiple temporary difference. In case of multiple temporary difference, we have to categorize all temporary difference into future taxable amount and future deductible amounts. The total amount of future taxable amounts multiplied by future tax rate will generate deferred tax liability and total amount of future deductible amount multiplied by future tax rate will generate deferred tax asset.

To prepare: The journal entry to recognize the income tax benefit of the net operating loss in 2018 through carryback option.

2.

To determine

To show: The lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss.

3.

To determine

To prepare: The journal entry to record the income taxes in 2019 assuming pre-tax accounting income is $60 million.

Expert Solution & Answer

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Answer 5

Chapter 16, Problem 16.10P

1.

To determine

Net Operating Loss Carryforward

The net operating loss is considered as negative taxable income. When the tax-deductible expenses exceed the taxable revenues, the net operating loss is carry forwarded as it helps in getting deductions in future taxable amount.

Net Operating Loss Carryback

The net operating loss is considered as negative taxable income. It can be used in other fiscal year to offset the taxable income. The net operating loss carry back helps the companies to get reduction in the taxes from the past profitable years, in the form of tax refund, for the tax paid on the profit earned on those years.

Temporary Difference

Temporary difference refers to the difference of one income recognized by the tax rules and accounting rules of a company in different periods. Consequently, the difference between the amount of assets and liabilities reported in the financial reports and the amount of assets and liabilities as per the company’s tax records, is known as temporary difference.

Multiple Temporary Difference

It is very unlikely to have a single temporary difference in any company. In that case, the same concept of temporary difference will be applicable for multiple temporary difference. In case of multiple temporary difference, we have to categorize all temporary difference into future taxable amount and future deductible amounts. The total amount of future taxable amounts multiplied by future tax rate will generate deferred tax liability and total amount of future deductible amount multiplied by future tax rate will generate deferred tax asset.

To prepare: The journal entry to recognize the income tax benefit of the net operating loss in 2018 through carryback option.

2.

To determine

To show: The lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss.

3.

To determine

To prepare: The journal entry to record the income taxes in 2019 assuming pre-tax accounting income is $60 million.

Answer 6

Chapter 16, Problem 16.10P

1.

To determine

Net Operating Loss Carryforward

The net operating loss is considered as negative taxable income. When the tax-deductible expenses exceed the taxable revenues, the net operating loss is carry forwarded as it helps in getting deductions in future taxable amount.

Net Operating Loss Carryback

The net operating loss is considered as negative taxable income. It can be used in other fiscal year to offset the taxable income. The net operating loss carry back helps the companies to get reduction in the taxes from the past profitable years, in the form of tax refund, for the tax paid on the profit earned on those years.

Temporary Difference

Temporary difference refers to the difference of one income recognized by the tax rules and accounting rules of a company in different periods. Consequently, the difference between the amount of assets and liabilities reported in the financial reports and the amount of assets and liabilities as per the company’s tax records, is known as temporary difference.

Multiple Temporary Difference

It is very unlikely to have a single temporary difference in any company. In that case, the same concept of temporary difference will be applicable for multiple temporary difference. In case of multiple temporary difference, we have to categorize all temporary difference into future taxable amount and future deductible amounts. The total amount of future taxable amounts multiplied by future tax rate will generate deferred tax liability and total amount of future deductible amount multiplied by future tax rate will generate deferred tax asset.

To prepare: The journal entry to recognize the income tax benefit of the net operating loss in 2018 through carryback option.

Answer 7

Chapter 16, Problem 16.10P

1.

To determine

Net Operating Loss Carryforward

The net operating loss is considered as negative taxable income. When the tax-deductible expenses exceed the taxable revenues, the net operating loss is carry forwarded as it helps in getting deductions in future taxable amount.

Net Operating Loss Carryback

The net operating loss is considered as negative taxable income. It can be used in other fiscal year to offset the taxable income. The net operating loss carry back helps the companies to get reduction in the taxes from the past profitable years, in the form of tax refund, for the tax paid on the profit earned on those years.

Temporary Difference

Temporary difference refers to the difference of one income recognized by the tax rules and accounting rules of a company in different periods. Consequently, the difference between the amount of assets and liabilities reported in the financial reports and the amount of assets and liabilities as per the company’s tax records, is known as temporary difference.

Multiple Temporary Difference

It is very unlikely to have a single temporary difference in any company. In that case, the same concept of temporary difference will be applicable for multiple temporary difference. In case of multiple temporary difference, we have to categorize all temporary difference into future taxable amount and future deductible amounts. The total amount of future taxable amounts multiplied by future tax rate will generate deferred tax liability and total amount of future deductible amount multiplied by future tax rate will generate deferred tax asset.

To prepare: The journal entry to recognize the income tax benefit of the net operating loss in 2018 through carryback option.

Answer 8

2.

To determine

To show: The lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss.

Answer 9

2.

To determine

To show: The lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss.

Answer 10

3.

To determine

To prepare: The journal entry to record the income taxes in 2019 assuming pre-tax accounting income is $60 million.

Answer 11

3.

To determine

To prepare: The journal entry to record the income taxes in 2019 assuming pre-tax accounting income is $60 million.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 16 - Prob. 16.1Q Ch. 16 - A deferred tax liability (or asset) is described...Ch. 16 - Prob. 16.3Q Ch. 16 - Prob. 16.4Q Ch. 16 - Temporary differences result in future taxable or...Ch. 16 - Identify three examples of differences with no...Ch. 16 - The income tax rate for Hudson Refinery has been...Ch. 16 - Suppose a tax reform bill is enacted that causes...Ch. 16 - A net operating loss occurs when tax-deductible...Ch. 16 - Prob. 16.10Q

To show: The lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss.

To prepare: The journal entry to record the income taxes in 2019 assuming pre-tax accounting income is $60 million.

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