Horner Corporation has a deferred tax asset at December 31, 2015 of $80,000 due to the recognition of potential tax benefits of an operating loss carryforward. The enacted tax rates are as follows: 40% for 2012-2014; 35% for 2015; and 30% for 2016 and thereafter. Assuming that management expects that only 60% of the related benefits will actually be realized, a valuation account should be established in the amount of: a. $80,000 b. $32,000 C. $28,000 d. $24,000
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- Blossom Corporation has a deferred tax asset at December 31, 2022 of $ 250000 due to the recognition of potential tax benefits of an operating loss carryforward. The enacted tax rates are as follows: 30% for 2019–2021; 25% for 2022; and 20% for 2023 and thereafter. Assuming that management expects that only 50% of the related benefits will actually be realized, a valuation account should be established in the amount of:Ivanhoe Corporation has a deferred tax asset at December 31, 2026 of $210000 due to the recognition of potential tax benefits of an operating loss carryforward. The enacted tax rates are as follows: 30% for 2023-2025; 25% for 2026; and 20% for 2027 and thereafter. Assuming that management expects that only 50% of the related benefits will be realized, a valuation account should be established in the amount of O $36750. O $31500. O $105000. O $42000. ofAssume that The Bell Company operates in an industry for which NOL carryback is allowed. The Bell Company had the following operating results: Year Income (loss) Tax rate Income tax 2018 40,000 25 % 10,000 2019 40,000 25 % 10,000 2020 50,000 30 % 15,000 2021 (130,000 ) 30 % 0 What is the Deferred tax Asset in 2021?
- Drew Company has a deferred tax asset of $54,000 before recording an allowance of $7000 for estimating it is more likely than not that this amount will not be realized in the future. The result of recording this allowance is The deferred tax asset will now be a net amount of $47,000 Income tax expense will be reduced by $7000 x the tax rate. Income tax expense will be increased by $7000 x the tax rate. Net income will be increased by $7000.In 2023, HD had reported a deferred tax asset of $226 million with no valuation allowance. At December 31, 2024, the account balances of HD Services showed a deferred tax asset of $290 million before assessing the need for a valuation allowance and income taxes payable of $114 million. HD determined that it was more likely than not that 30% of the deferred tax asset ultimately would not be realized. HD made no estimated tax payments during 2024. What amount should HD report as income tax expense in its 2024 income statement? Note: Round your calculations to the nearest whole million.(NOL Carryback and Carryforward, Valuation Account Needed) Beilman Inc. reports the following pretax income (loss) for both book and tax purposes. (Assume the carryback provision is used where possible for a net operating loss.) Year Pretax Income (Loss) Tax Rate 2015 $120,000 40% 2016 90,000 40 2017 (280,000) 45 2018 120,000 45 The tax rates listed were all enacted by the beginning of 2015. Instructions(a) Prepare the journal entries for years 2015–2018 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryback and loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized.(b) Prepare the income tax section of the 2017 income statement beginning with the line “Operating loss before income taxes.”(c) Prepare the income tax section of the 2018 income statement beginning with the line “Income…
- (NOL without Valuation Account) Jennings Inc. reported the following pretax income (loss) and related tax rates during the years 2013–2019. Pretax Income (loss) Tax Rate 2013 $ 40,000 30% 2014 25,000 30% 2015 50,000 30% 2016 80,000 40% 2017 (180,000) 45% 2018 70,000 40% 2019 100,000 35% Pretax financial income (loss) and taxable income (loss) were the same for all years since Jennings began business. The tax rates from 2016–2019 were enacted in 2016. Instructions(a) Prepare the journal entries for the years 2017–2019 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryback and carryforward. Assume that Jennings elects the carryback provision where possible and expects to realize the benefits of any loss carryforward in the year that immediately follows the lossyear.(b) Indicate the effect the 2017 entry(ies) has on the December 31, 2017, balance sheet.(c) Prepare the portion of the income statement,…At the beginning of 2018, FECC Corporation had discovered that the depreciation expense inthe years prior to 2018 was incorrectly calculated and recorded. For the years before 2018,total depreciation expense of $165,000 was recorded, whereas correct total depreciationexpense was $75,000. The tax rate is 30%. FECC follows IFRS and the deferred taxes method ofaccounting for income taxes.Required:1) Prepare FECC’s 2017 journal entry with respect to the depreciation expense that wasrecorded in the years prior to 2018.Big Bear Sporting Goods opened in 2022. They reported sales revenue of $375,000 and expenses of $460,000. There are no permanent or temporary differences, so the book loss and taxable loss will be the same. Big Bear plans on carrying forward the net operating loss (NOL). Assuming a 32% tax rate, what is the necessary journal entry in 2022 to record the NOL carryforward? Group of answer choices Deferred Tax Asset 27,200 Income Tax Benefit 27,200 Deferred Tax Asset 120,000 Income Tax Benefit 120,000 Income Tax Refund Receivable 120,000 Income Tax Benefit 120,000 Income Tax Refund Receivable 27,200 Income Tax Benefit 27,200
- XYZ Company reported the following pretax income (loss) and related tax rates during the years 2016-2021. Year Pretax Income (loss) Таx rate 2016 $75,000 30% 2017 150,000 30% 2018 240,000 40% 2019 (540,000) 48% 2020 210,000 40% 2021 300,000 42% a. Prepare the journal entries for the years 2019 and 2020 to record income taxes and the tax effects of the loss. Assume that XYZ elects the carryback provision where possible and it is probable that it will realize benefits of any loss carryforward. b. Prepare the portion of the income statement that presents your answer in part (a) for the year ended 2019.The 2018 balance sheets and income statement for Netflix Inc. follow. Refer to these financial statements to answer the requirements. NETFLIX INC. Consolidated Statements of Earnings For Year Ended December 31, $ thousands Revenues 2018 $15,953,439 Cost of revenues 9,967,538 Marketing 2,528,567 Technology and development 1,221,814 General and administrative 789,392 Operating income 1,446,128 Other income (expense) Interest expense (420,493) Interest and other income 200,823 Income before income taxes 1,226,458 Provision for income taxes 15,216 Net income $1,211,242 NETFLIX INC. Consolidated Balance Sheets in thousands, except par value Current assets Cash and cash equivalents 2018 2017 $3,953,581 $2,822,795 Current content assets, net Other current assets Total current assets Noncurrent content assets, net Property and equipment, net Other noncurrent assets Total assets Current liabilities Current content liabilities Accounts payable 5,151,186 4,470,032 907,564 10,012,331 536,245…8. In 2020, Ross Stores had reported a deferred tax asset of $146 million with no valuation allowance. At December 31, 2021, the account balances of Ross showed a deferred tax asset of $190 million before assessing the need for a valuation allowance and income taxes payable of $94 million. Ross determined that it was more likely than not that 30% of the deferred tax asset ultimately would not be realized. Ross made no estimated tax payments during 2021. What amount should Ross report as income tax expense in its 2021 income statement? (Round your calculations to the nearest whole million.) Multiple Choice $57 million $107 million $144 million $94 million