Income (Loss) Tax Rate ) ) Warning Don\'t show me this message again for the ass
ID: 2469796 • Letter: I
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Income (Loss)
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What entries for income taxes should be recorded for 2010? (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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 $87,870 30 % 2007 121,200 30 % 2008 51,510 35 % 2009 145,440 50 % 2010 (454,500 ) 40 % 2011 272,700 40 % 2012 90,900 40 % 2013 318,150 40 % 2014 (181,800 ) 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. Collapse question part (a) What entries for income taxes should be recorded for 2010? (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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 $87,870 30 % 2007 121,200 30 % 2008 51,510 35 % 2009 145,440 50 % 2010 (454,500)
40 % 2011 272,700 40 % 2012 90,900 40 % 2013 318,150 40 % 2014 (181,800)
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.
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Explanation / Answer
Income tax refund receivable $ 90,748.50 Benefit due to loss carry back $ 90,748.50 (To record Carry back) deferred tax $ 103,020 Benefit due to loss carry forward $ 103,020 (To record Carry forward) Income Tax Refund Receivable = [($51,510 x 35%) + ($145,440 x 50%)] = $90748.50 Benefit Due to Loss Carry forward = ($454,500 – $51,510 – $145,440 = $257,550) ; ($257,550 x 40%) = $103,020