During its first year of operations, Nile.com reported a net operating loss of $15 million for financial reporting and tax purposes. The enacted tax rate is 40%. Prepare the journal entry to recognize the income tax benefit of the net operating loss.
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During its first year of operations, Nile.com reported a net operating loss of $15 million for financial reporting and tax purposes. The enacted tax rate is 40%. Prepare the
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- During 2021, its first year of operations, Sherrod, Inc. reported a net operating loss of $5 million for financial reporting and tax purposes. The enacted tax rate is 25%. Prepare the journal entry to recognize the income tax benefit of the net operating loss.AirParts Corporation reported a net operating loss of $25 million for financial reporting and tax purposes. Taxable income last year and the previous year, respectively, was $20 million and $15 million. The enacted tax rate each year is 40%. Prepare the journal entry to recognize the income tax benefit of the net operating loss. AirParts elects the carryback option.For the first year of operations, Fidelity Engineering reported pretax accounting income of $120,000. Interest revenue from municipal bonds is $20,000. Depreciation expense reported for tax purposes was in excess of depreciation expenses reported on the income statement of $40,000. Tax rate is 25%. How much is the taxable income? How much is Income Tax Payable? How much is income tax expense? Any DTA or DTL? If so, how much?
- The Foyer Company had an enacted income tax rate of 25%. The company ended Year 1 with a deferred income tax liability of $30,000, a deferred income tax asset of $40,000, and a valuation allowance of $9,000. The enacted tax rate at the beginning of Year 2 was raised to 28%. The company ended Year 2 with a deferred income tax liability of $60,000, a deferred income tax asset of $30,000, and a valuation allowance of $14,000. On the company's Year 2 income statement, what is the amount of income tax expense (deferred) that is reported?Wynn Farms reported a net operating loss of $144,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynn's first four years of operation were as follows: Taxable Tax Income 2017 $ 71,000 20% 2018 81,000 20 2019 124,000 25 2020 71,000 40 Rates Income Taxes Paid Required: 1. Prepare the journal entry to recognize the Income tax benefit of the net operating loss. NOL carrybacks are not allowed for most companies, except for property and casualty Insurance companies as well as some farm-related businesses. Assume Wynn is one of those businesses. 2. Show the lower portion of the 2021 Income statement that reports the income tax benefit of the net operating loss. Complete this question by entering your answers in the tabs below. View transaction list Required 1 Required 2 Prepare the journal entry to recognize the income tax benefit of the net operating loss. NOL carrybacks are not allowed for most companies,…During its first year of operations, Alcoa Corporation reported a net operating loss of $800,000 for financial reporting and tax purposes. The enacted tax rate is 25%. Which of the following is true? a. Deferred tax assets are increased by $800,000 b. Deferred tax liabilities are increased by $800,000 c. Net income is -$600,000 d. Income tax expense is debited by $200,000 e. Net income is -$800,000
- The following data represent the diffence between accounting and tax income for Seafood Imports Inc., whose pre-tax accounting income is $695,000 for the year ended December 31. The company's income tax rate is 45%. Additional information relevant to income taxes includes the following. a. Capital cost allowance of $270,000 exceeded accounting depreciation expense of $157,000 in the current year. b. Rents of $29,000, applicable to next year, had been collected in December and deferred for financial statement purposes but are taxable in the year received. c. In a previous year, the company established a provision for product warranty expense. A summary of the current year's transactions appears below: ii. Warranty Expense for the Year 42,500 iii. Payments made to fulfill product warranties. 35,000 d. Insurance expense to cover the company's excutive officers was $7,500 for the year. Required: Prepare all the journal entries to record income taxes for Seafood…Westwind Corporation reports the following results for the current year: Gross profit on sales $250,000 Long-term capital gain 25,000 Long-term capital loss 10,000 Short-term capital gain 7,500 Short-term capital loss 12,500 Operating expenses 80,000 What are Westwind's taxable income and regular tax liability before credits for the current year?Saginaw Incorporated completed its first year of operations with a pretax loss of $627,500. The tax return showed a net operating loss of $756,500, which the company will carry forward. The $129,000 book-tax difference results from excess tax depreciation over book depreciation. Management has determined that it should record a valuation allowance equal to the net deferred tax asset. Assuming the current tax expense is zero, prepare the journal entries to record the deferred tax provision and the valuation allowance. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Required: a. Prepare the journal entry to record the deferred tax consequences for recognition of the current year NOL before considering the valuation allowance. b. Prepare the journal entry to record the deferred tax consequences of the depreciation book-tax difference. c. Prepare the journal entry to record the deferred tax consequences of the valuation…
- In its first year of operations, Seagate Tech reported pretax accounting income of $780 million for the current year. Depreciation reported in the tax return in excess of depreciation in the income statement was $900 million. The excess tax will reverse itself evenly over the next three years. The current year's tax rate of 25% will be reduced under the current law to 30% next year and 35% for all subsequent years. At the end of the current year, the deferred tax liability related to the excess depreciation will be: Multiple Choice $315 million. $300 million. $270 million. $360 million.A company reports pretax accounting income of $30 million, but because of a single temporary difference, taxable income is $32 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the appropriate journal entry to record income taxes.At the end of the year, Huskies Together Company has pretax financial income of $550,000. Included in the $550,000 is $70,000 interest income on municipal bonds, $25,000 fine for dumping hazardous waste, and depreciation of $60,000. Depreciation for tax purposes is $45,000. Compute income taxes payable, assuming the tax rate is 30% for all periods. Prepare the journal entry at the end of the year.
