obac Company reported an operating loss of $129,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25% for 2021 and all future years. Assume that Tobac operates in an industry for which NOL carryback is allowed and elects a loss carryback. No valuation allowance is needed for any deferred tax assets. Taxable income, tax rates, and income taxes paid in Tobac's first four years of operations were as follows: Taxable income Tax rates Taxes paid 2017 $ 27,000 30 % $ 8,100 2018 $ 32,000 30 % $ 9,600 2019 $ 39,000 35 % $ 13,650 2020 $ 37,000 40 % $ 14,800 Required: 1. Prepare a compound journal entry to record Tobac's tax provision for the year 2021. 2. Compute Tobac's net loss for 2021.
obac Company reported an operating loss of $129,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25% for 2021 and all future years. Assume that Tobac operates in an industry for which NOL carryback is allowed and elects a loss carryback. No valuation allowance is needed for any deferred tax assets. Taxable income, tax rates, and income taxes paid in Tobac's first four years of operations were as follows: Taxable income Tax rates Taxes paid 2017 $ 27,000 30 % $ 8,100 2018 $ 32,000 30 % $ 9,600 2019 $ 39,000 35 % $ 13,650 2020 $ 37,000 40 % $ 14,800 Required: 1. Prepare a compound journal entry to record Tobac's tax provision for the year 2021. 2. Compute Tobac's net loss for 2021.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 3RE: In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During...
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Tobac Company reported an operating loss of $129,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25% for 2021 and all future years. Assume that Tobac operates in an industry for which NOL carryback is allowed and elects a loss carryback. No valuation allowance is needed for any
Taxable income |
Tax rates |
Taxes paid |
|||||||
2017 | $ | 27,000 | 30 | % | $ | 8,100 | |||
2018 | $ | 32,000 | 30 | % | $ | 9,600 | |||
2019 | $ | 39,000 | 35 | % | $ | 13,650 | |||
2020 | $ | 37,000 | 40 | % | $ | 14,800 | |||
Required:
1. Prepare a compound
2. Compute Tobac's net loss for 2021.
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