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n the first two years of operations, a company reports taxable income of $115,000 and $165

n the first two years of operations, a company reports taxable income of $115,000 and $165,000, respectively. In the first two years, the tax rates were 38% and 32% respectively. It is now the end of the third year, and the company has a loss of$160,000 for tax purposes. The company carries losses to the earliest year possible. The tax rate is currently 25%.

 

Requirement:

a. How much tax was paid in year 1 and year 2?

b. Compute the amount of income tax payable or receivable in the current (third) year.

 

9) In the first two years of operations, a company reports taxable income of $125,000 and $65,000, respectively. In the first two years, the tax rates were 44% and 48% respectively. It is now the end of the third year, and the company has a loss of $260,000 for tax purposes. The company carries losses to the earliest year possible. The tax rate is currently 25%.

 

Requirement:

a. How much tax was paid in year 1 and year 2?

b. Compute the amount of income tax payable or receivable in the current (third) year.

 

 

10) In the first year of operations, a company reports taxable income of $125,000 and paid $31,250 of income taxes. It is now the end of the second year, and the company has a loss of $175,000 for tax purposes. The company's management believes it is probable the company will be able to use up its tax losses. The tax rate is currently 40%.

 

Requirement:

Compute the amounts of income tax receivable and/ or deferred income tax asset in the current (second) year.

Dec 12 2019 View more View Less

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