Question

For its first taxable year, Rony Inc.’s accounting records showed the following:
Operating loss per books …………………… $(800,000)
Temporary book/tax difference ……………. 90,000
Net operating loss for tax ……………………. $(710,000)
a. Use a 34 percent rate to compute Rony’s deferred tax asset with respect to the $90,000 book/tax difference.
b. Use a 34 percent rate to compute Rony’s deferred tax asset with respect to its $710,000 NOL carryforward.
c. Compute Rony’s tax benefit (negative tax expense) reported on its first income statement.


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  • CreatedNovember 03, 2015
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