Dodd Corp. is preparing its December 31 financial statements and must determine the proper accounting treatment for the following situations:

• For the year ended December 31, Dodd has a loss carry forward of $180,000 available to offset future taxable income. However, there are no temporary differences.
• On December 30, Dodd received a $200,000 offer for its patent. Dodd's management is considering whether to sell the patent. The offer expires on February 28 of the next year. The patent has a carrying amount of $100,000 at December 31.

Assume a current and future income tax rate of 21%. In its income statement, Dodd should recognize an increase in net income of:

Dodd Corp. is preparing its December 31 financial statements and must determine the proper accounting treatment for the following situations:

• For the year ended December 31, Dodd has a loss carry forward of $180,000 available to offset future taxable income. However, there are no temporary differences.
• On December 30, Dodd received a $200,000 offer for its patent. Dodd's management is considering whether to sell the patent. The offer expires on February 28 of the next year. The patent has a carrying amount of $100,000 at December 31.

 

Assume a current and future income tax rate of 21%. In its income statement, Dodd should recognize an increase in net income? 

Answer rating: 100% (QA)

1 Loss Carry Forward Dodd Corp has a loss carry forward of 180000 available to offset future taxable ... View the full answer