Beltway Company reported a taxable loss of $100,000 in 20X3, its first year of operations, and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Beltway Company reported a taxable loss of $100,000 in 20X3, its first year of operations, and taxable income of $0 in 20X4. Beltway had no temporary or permanent differences in either year. At the end of 20X3, Beltway believed that 30% of the operating loss carryforward would not be realized; therefore, a valuation allowance of $12,000 (30% of $100,000 NOL × 40% tax rate) was necessary. At the end of 20X4, Beltway believes that the valuation allowance is no longer necessary. Assuming a tax rate of 40%, Beltway should report total income tax expense (benefit) of: А ($40,000) in 20X3 and $0 in 20X4. B ($28,000) in 20X3 and ($12,000) in 20X4. C ($28,000) in 2OX3 and $0 in 20X4. D $0 in 20X3 and $0 in 20X4. Beltway Company reported a taxable loss of $100,000 in 20X3, its first year of operations, and taxable income of $0 in 20X4. Beltway had no temporary or permanent differences in either year. At the end of 20X3, Beltway believed that 30% of the operating loss carryforward would not be realized; therefore, a valuation allowance of $12,000 (30% of $100,000 NOL × 40% tax rate) was necessary. At the end of 20X4, Beltway believes that the valuation allowance is no longer necessary. Assuming a tax rate of 40%, Beltway should report total income tax expense (benefit) of: А ($40,000) in 20X3 and $0 in 20X4. B ($28,000) in 20X3 and ($12,000) in 20X4. C ($28,000) in 2OX3 and $0 in 20X4. D $0 in 20X3 and $0 in 20X4.
Expert Answer:
Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Posted Date:
Students also viewed these accounting questions
-
Lin has just completed its first year of operations and has a number of differences between its pretax financial income and taxable income. The differences at the end of 2016 are as follows: a. Lin...
-
Braun has just completed its first year of operations and has a number of differences between its pretax financial income and taxable income. The differences at the end of 2013 are as follows: a....
-
Lin has just completed its first year of operations and has a number of differences between its pretax financial income and taxable income. The differences at the end of 2019 are as follows: a. Lin...
-
Write an application that works as a comparator. Your program should read two numbers from the user and print 0 if they are equal to each other, 1 if the first number is greater, and 1 if the second...
-
You are working with the top management of one of your clients in selecting the U.S. location for a new manufacturing operation. Craft a plan for the CEO to use in discussions with the economic...
-
M. C. Jones purchased a truck for $30,500 to be used in his business. He is considering depreciating the truck by two methods: units-of-output (assuming total miles driven of 80,000) and...
-
A mutual fund has provided investment yield rates for five consecutive years as follows: Determine \(r_{1}\) and \(r_{2}\), the lag 1 and lag 2 autocorrelation coefficients. Determine \(r_{1}\) and...
-
In what ways might a rms suppliers improve or undermine the rms Lean efforts? Can you think of any examples from the chapter that illustrate this idea?
-
Two lakes are located on the same river, as shown in Figure 11-6. A is upstream of B. Water flows into A at a rate SA; it evaporates from A at a rate EA and from B at a rate EB. A tributary flows...
-
Reconstruct the following syllogistic forms and use the five rules for syllogisms to determine if they are valid from the Boolean standpoint, conditionally valid from the Aristotelian standpoint, or...
-
Analyze each of the following arguments in terms of new case, comparison cases, known similarities, and inferred similarity. Then indicate what seems to you the most significant relevant...
-
Directions: Analyze each of the following arguments in terms of new case, comparison cases, known similarities, and inferred similarity. Then indicate what seems to you the most significant relevant...
-
Directions: Analyze each of the following arguments in terms of new case, comparison cases, known similarities, and inferred similarity. Then indicate what seems to you the most significant relevant...
-
Find and explain the conventional meaning of 3 symbols in Blake's poem "The Chimney Sweeper". What is the writer's purpose in using these symbols? William Blake "The Chimney Sweeper" Songs of...
-
What is the business definition of stakeholder, and how is it different from the public?
-
What are the six attributes of a variable? Explain three of them. A Boolean type could be represented by a single bit. State the advantage and disadvantages. Describe a situation in which the...
-
Identify one local business that uses a perpetual inventory system and another that uses a periodic system. Interview an individual in each organization who is familiar with the inventory system and...
-
David Company's income statements for the year ended December 31, 2017, and December 31, 2016 and presented here: Additional facts are as follows: a. The loss from operations of the discontinued...
-
Panther Company currently' sponsors a defined benefit pension plan for its employees. At the end of 2016, the plan had a projected benefit obligation of $1,456,000 and fair value of plan assets of...
-
The following are independent events: a. A partnership is preparing to become a corporation and sell stock to the public. At this time, it decides to switch from accelerated to straight-line...
-
Financial items for George Karatsis IT Services on 31 May 2024 are presented below in alphabetical order. Required (a) Prepare a statement of financial position similar to the one in figure 2.2. (b)...
-
During the year ended 30 June 2024, Skilled Services, a provider of temporary secretary personnel, had collected receipts from clients for a total value of \($250000.\) Wages of \($136000\) had been...
-
Rebecca Tallance operates a rent a dress business from her home. She keeps her accounting records for business activities completely separate from her records for personal activities. At 30 June...
Study smarter with the SolutionInn App