In the first year of operations, a company reported taxable income of $160,000 and paid $32,000 of
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In the first year of operations, a company reported taxable income of $160,000 and paid $32,000 of income taxes. It is now the end of the second year, and the company has a loss of $300,000 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 25%.
Required:
Compute the amounts of income tax receivable and/or deferred income tax asset in the current (second) year.
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