Determine taxable income in each of the following independent cases. In all cases, the company was...
Determine taxable income in each of the following independent
cases. In all cases, the company was very profitable in all years
prior to 2017 and it had retained earnings of $1,000,000 at the end
of 2017.
- In 2018, Company A has taxable income of $60,000 prior to consideration of any net operating loss. In 2017, the Company incurred a net operating loss of $10,000. They did not elect to waive the carryback period. Determine 2018 taxable income.
- In 2018, Company B has taxable income of $50,000 prior to consideration of any net operating loss. In 2017, the Company incurred a net operating loss of $20,000. They elected to waive the carryback period. Determine 2018 taxable income.
- In 2019, Company C has taxable income of $35,000 prior to consideration of any net operating loss. In 2018, the Company incurred a net operating loss of $30,000. Determine 2019 taxable income.
- In 2019, Company D has taxable income of $35,000 prior to consideration of any net operating loss. In 2017, the Company incurred a net operating loss of $5,000. They elected to waive the carryback period. In 2018, the Company incurred a net operating loss of $40,000. Determine 2019 taxable income.
Homework Answers
CASE (1) :TAXABLE INCOME OF COMPANY A IN 2018 IS 50,000(60000-10000).BECAUSE THE COMPANY HAS NOT ELECTED TO WAIVE BACK PERIOD.THEREFORE PAST LOSSES CAN BE ADJUSTED.
CASE(2) :TAXABLE INCOME OF COMPANY B IN 2018 IS 50000.BECAUSE THEY ELECTED TO WAIVE THE CARRYBACK PERIOD.THAT MEANS THE LOSS OF 2017 IS ADJUSTED IN FUTURE YEARS.
CASE(3) :TAXABLE INCOME OF COMPANY C IN 2019 IS 5000.BECAUSE PAST LOSS OF 30000 (2018 LOSS) CAN BE ADJUSTED AGAINST CURRUNT PROFIT OF 35000(2019 PROFIT).
CASE(4) : TAXABLE INCOME OF COMPANY D IN 2019 IS 0.BECAUSE THEY ELECTED TO WAIVE THE CARRY BACK PERIOD. THAT MEANS THE LOSS OF 2018 IS ADJUSTED IN FUTURE YEARS.
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Determine taxable income in each of the following independent
cases. In all cases, the company was...
Suppose A company had the following taxable income and tax rates: 2015 20162017 2018 Taxable income...
Suppose A company had the following taxable income and tax rates: 2015 20162017 2018 Taxable income S50,000 S100,000 $200,000 ($210,000) Income tax rate 35% company chooses NOL carryback, it will receive a tax refund of $74,000 Recall that the from the earlier year company SHOULD start offsetting the NOL with income starting Example 1a Collin Corp. had the following tax information. Year Taxable Tax rate Tax paid 2016 2017 2018 income S300,000 325,000 400,000 35% 30% 30% S 105,000 97...
Puritan Corp. reported the following pretax accounting income and taxable income for its first three years...
Puritan Corp. reported the following pretax accounting income and taxable income for its first three years of operations: 2017 2018 2019 $ 341,000 (518, 000) 700,000 Puritan's tax rate is 38% for all years. Puritan elected a loss carryback As of December 31, 2018. Puritan was certain that it would recover the full tax benefit of the NOL that remained after the operating loss carryback. What did Puritan report on December 31, 2018, as the deferred tax asset for the...
In 2015, Anna Kate, Inc. reported taxable income of 235,000. In 2016, it reported taxable income...
In 2015, Anna Kate, Inc. reported taxable income of 235,000. In 2016, it reported taxable income of 25,000. In 2017, it reported taxable income of 105,000. In 2018, Anna Kate experienced a net operating loss of 90,000. Assuming that Anna Kate chooses to forgo the carryback, how would Anna Kate apply this net operating loss? Please illustrate your answer for each year that is applicable. If there is a carryforward, the corporation will apply the carryforward in calculating taxable income...
Conlin Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2015 $300,000...
Conlin Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2015 $300,000 35% $105,000 2016 325,000 30 97,500 2017 400,000 30 120,000 In 2018, Conlin suffered a net operating loss of $480,000, which it elected to carry back. The 2018 enacted tax rate is 29%. Prepare Conlin’s entry to record the effect of the loss carryback.
The pretax financial income of Flounder Company differs from its taxable income throughout each o...
The pretax financial income of Flounder Company differs from its
taxable income throughout each of 4 years as follows.
Year
Pretax
Financial Income
Taxable Income
Tax Rate
2017
$305,000
$173,000
35
%
2018
349,000
216,000
40
%
2019
358,000
277,000
40
%
2020
429,000
615,000
40
%
Pretax financial income for each year includes a nondeductible
expense of $29,100 (never deductible for tax purposes). The
remainder of the difference between pretax financial income and
taxable income in each period is...
Cheyenne Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2015 $306,000...
Cheyenne Corporation had the following tax
information.
Year
Taxable Income
Tax Rate
Taxes Paid
2015
$306,000
34%
$104,040
2016
324,000
29%
93,960
2017
393,000
29%
113,970
In 2018, Cheyenne suffered a net operating loss of $488,000, which
it elected to carry back. The 2018 enacted tax rate is 28%.
Prepare Cheyenne’s entry to record the effect of the loss
carryback. (Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no
entry is required, select...
Larkspur Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2015 $294,000...
Larkspur Corporation had the following tax
information.
Year
Taxable Income
Tax Rate
Taxes Paid
2015
$294,000
35%
$102,900
2016
332,000
30%
99,600
2017
399,000
30%
119,700
In 2018, Larkspur suffered a net operating loss of $476,000, which
it elected to carry back. The 2018 enacted tax rate is 29%.
Prepare Larkspur’s entry to record the effect of the loss
carryback. (Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no
entry is required, select...
Bonita Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2015 $304,000...
Bonita Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2015 $304,000 38% $115,520 2016 322,000 33% 106,260 2017 404,000 33% 133,320 In 2018, Bonita suffered a net operating loss of $481,000, which it elected to carry back. The 2018 enacted tax rate is 32%. Prepare Bonita’s entry to record the effect of the loss carryback. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select...
Oblem Two: 15 points The pretax financial income (or loss) figures for John Spiller Company are a...
problem three
oblem Two: 15 points The pretax financial income (or loss) figures for John Spiller Company are as follows. 2015 2016 2017 $90,000 $100,000 50,000 8 $0310,000) 2018 2019 financial income (or loss) and taxable income(loss) were the same for all years involved. Assme a 40% $80,000 tax rate for 2015 through 2017 and a 45% tax rate for the remaining years. Required Prepare the journal entries for the ycars 2016 to 2018 to record income tax expense and...
Shamrock, Inc. reported the following amounts for taxable income (net operating loss) for the first 3...
Shamrock, Inc. reported the following amounts for taxable income (net operating loss) for the first 3 years of its operations; there were no temporary differences in any year and the tax rate was 35% for 2017 and 25% for 2018 and 2019: 2017 $ 100,000 2018 (200,000) 2019 180,000 What amount should Shamrock report as its current income tax expense for 2019?
Suppose A company had the following taxable income and tax rates: 2015 20162017 2018 Taxable income S50,000 S100,000 $200,000 ($210,000) Income tax rate 35% company chooses NOL carryback, it will receive a tax refund of $74,000 Recall that the from the earlier year company SHOULD start offsetting the NOL with income starting Example 1a Collin Corp. had the following tax information. Year Taxable Tax rate Tax paid 2016 2017 2018 income S300,000 325,000 400,000 35% 30% 30% S 105,000 97...
Puritan Corp. reported the following pretax accounting income and taxable income for its first three years of operations: 2017 2018 2019 $ 341,000 (518, 000) 700,000 Puritan's tax rate is 38% for all years. Puritan elected a loss carryback As of December 31, 2018. Puritan was certain that it would recover the full tax benefit of the NOL that remained after the operating loss carryback. What did Puritan report on December 31, 2018, as the deferred tax asset for the...
The pretax financial income of Flounder Company differs from its
taxable income throughout each of 4 years as follows.
Year
Pretax
Financial Income
Taxable Income
Tax Rate
2017
$305,000
$173,000
35
%
2018
349,000
216,000
40
%
2019
358,000
277,000
40
%
2020
429,000
615,000
40
%
Pretax financial income for each year includes a nondeductible
expense of $29,100 (never deductible for tax purposes). The
remainder of the difference between pretax financial income and
taxable income in each period is...
Cheyenne Corporation had the following tax
information.
Year
Taxable Income
Tax Rate
Taxes Paid
2015
$306,000
34%
$104,040
2016
324,000
29%
93,960
2017
393,000
29%
113,970
In 2018, Cheyenne suffered a net operating loss of $488,000, which
it elected to carry back. The 2018 enacted tax rate is 28%.
Prepare Cheyenne’s entry to record the effect of the loss
carryback. (Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no
entry is required, select...
Larkspur Corporation had the following tax
information.
Year
Taxable Income
Tax Rate
Taxes Paid
2015
$294,000
35%
$102,900
2016
332,000
30%
99,600
2017
399,000
30%
119,700
In 2018, Larkspur suffered a net operating loss of $476,000, which
it elected to carry back. The 2018 enacted tax rate is 29%.
Prepare Larkspur’s entry to record the effect of the loss
carryback. (Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no
entry is required, select...
problem three
oblem Two: 15 points The pretax financial income (or loss) figures for John Spiller Company are as follows. 2015 2016 2017 $90,000 $100,000 50,000 8 $0310,000) 2018 2019 financial income (or loss) and taxable income(loss) were the same for all years involved. Assme a 40% $80,000 tax rate for 2015 through 2017 and a 45% tax rate for the remaining years. Required Prepare the journal entries for the ycars 2016 to 2018 to record income tax expense and...
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