ALB Company experienced a loss in 2020. 2020 Income Tax Rate 25% Taxable income (loss) ($65,000) No
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Question:
ALB Company experienced a loss in 2020.
2020
Income Tax Rate 25%
Taxable income (loss) ($65,000)
No temporary differences from 2018 to 2020 other than any related to a net operating loss carryforward.
REQUIRED: Record income taxes for 2020 and 2021
- For 2021, the company computed taxable income of $45,000 and recognized a deferred tax liability balance of $2,250 related to the acquisition of depreciable assets in its year-end financial statements. These amounts were consistent with management’s expectations
- The income tax rate in 2020 and effective for 2021 and thereafter is 30%
- Management estimates the valuation allowance on the deferred tax asset related to its 2020 NOL to be zero
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