Exercise 19-10 Income (Loss) Tax Rate ) ) Account Titles and Explanation Debit C
ID: 2391678 • Letter: E
Question
Exercise 19-10
Income (Loss)
Tax Rate
)
)
Account Titles and Explanation
Debit
Credit
(To record carryback.)
(To record carryforward.)
Felicia Rashad Corporation
Income Statement (Partial)
Year ended December 31, 2010
Account Titles and Explanation
Debit
Credit
Felicia Rashad Corporation
Income Statement (Partial)
Year ended December 31, 2011
Account Titles and Explanation
Debit
Credit
Felicia Rashad Corporation
Income Statement (Partial)
Year ended December 31, 2014
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Exercise 19-10
Felicia Rashad Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2006 through 2014 as follows.Income (Loss)
Tax Rate
2006 $89,320 30 % 2007 123,200 30 % 2008 52,360 35 % 2009 147,840 50 % 2010 (462,000)
40 % 2011 277,200 40 % 2012 92,400 40 % 2013 323,400 40 % 2014 (184,800)
45 %Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. Assume the carryback provision is employed for net operating losses. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized.
Explanation / Answer
Solution 1:
Solution 2:
solution 3:
solution 4:
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Net Operating loss carryback Amount Rate of Tax Tax Recorded as Carried back - 2008 $52,360.00 35% $18,326.00 Carried back - 2009 $147,840.00 50% $73,920.00 Total Carryback $200,200.00 $92,246.00 Income tax benefit Net Operating loss Carryforward Carried forward $261,800.00 Realisable benefits of loss carry forward $261,800.00 40% $104,720.00 Deferred tax assetsRelated Questions
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