Which of the following would be considered negative evidence in determining whether Gratiot Corporation needs to record

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Which of the following would be considered negative evidence in determining whether Gratiot Corporation needs to record a valuation allowance for some or all of its deferred tax assets?

a. The company forecasts future taxable income because of its backlog of orders.

b. The company has a cumulative net loss over the current and prior two years.

c. The company has unfavorable temporary differences that will create future taxable income when they reverse.

d. The company had a net operating loss carryover expire in the current year.

e. Both (b) and (d) constitute negative evidence in assessing the need for a valuation allowance.

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Taxation Of Individuals And Business Entities 2021

ISBN: 9781260247138

12th Edition

Authors: Brian Spilker, Benjamin Ayers, John Barrick, Troy Lewis, John Robinson, Connie Weaver, Ronald Worsham

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