Friendly Corp. incurred an accounting and non-capital loss (tax loss) of $500,000 in Year 1, its first year of operations. There were no temporary differences in Year 1. Management estimates that it will generate sufficient future taxable income to realize the benefit of the non-capital loss over the next 20 years. The non-capital loss was not used in Year 2. The enacted tax rates are 30% in Year 1 and 28% in Year 2, and the proposed rate in Year 3 is 27%. 

What is the amount of the deferred tax asset that will be recognized in Friendly's Year 2 financial statements?

Answer rating: 100% (QA)

To calculate the deferred tax asset in Friendlys Year 2 financial statementswe need to consider the ... View the full answer