Do not give image format $ 400)$(800)Syer's 2020 NOL is driven by an unfortunate obsolescence of its primary product. Given great uncertainty in Syer's future profitability.Syer's management does not believe it is more likely than not that it will be able to realize deferred tax assets in future years. Syer'sfederal tax rate decreased from 35% to 21% starting in 2018.Required:1. Assume that Syer does not account for its NOL under the CARES Act. Instead, Syer accounts for its NOL using the generalrequirement that NOLS be carried forward. Prepare the appropriate journal entry to record Syer's 2020 income taxes, andindicate Syer's 2020 net income(loss).Req 1A$ 2002. Now assume that Syer does account for its NOLȚunder the CARES Act. Prepare the appropriate journal entry to record Syer's2020 income taxes, and indicate Syer's 2020 net income(loss).Complete this question by entering your answers in the tabs below.Net lossReq 2ACalculate Syer's 2020 net income(loss).Note: Net loss amounts should be indicated with a minus sign.50Req 18Show Transcribed TextReq 1A$0$ 200Net loss$ 400)$ (800)Syer's 2020 NOL is driven by an unfortunate obsolescence of its primary product. Given great uncertainty in Syer's future profitability,Syer's management does not believe it is more likely than not that it will be able to realize deferred tax assets in future years. Syer'sfederal tax rate decreased from 35% to 21% starting in 2018.50Req 18Req 28$0Required:1. Assume that Syer does not account for its NOL under the CARES Act. Instead, Syer accounts for its NOL using the generalrequirement that NOLS be carried forward. Prepare the appropriate journal entry to record Syer's 2020 income taxes, andindicate Syer's 2020 net income(loss).< Req 1A2. Now assume that Syer does account for its NOL under the CARES Act. Prepare the appropriate journal entry to record Syer's2020 income taxes, and indicate Syer's 2020 net income(loss).Req 2AComplete this question by entering your answers in the tabs below.Req 2A >Req 28Calculate Syer's 2020 net income(loss).Note: Net loss amounts should be indicated with a minus sign.< Req 2AReg 20 > Syer Company reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in millions):20172018$0$ 2002016$ 400)Syer's 2020 NOL is driven by an unfortunate obsolescence of its primary product. Given great uncertainty in Syer's future profitability.Syer's management does not believe it is more likely than not that it will be able to realize deferred tax assets in future years. Syer'sfederal tax rate decreased from 35% to 21% starting in 2018.Required:1. Assume that Syer does not account for its NOL under the CARES Act. Instead, Syer accounts for its NOL using the generalrequirement that NOLS be carried forward. Prepare the appropriate journal entry to record Syer's 2020 income taxes, andindicate Syer's 2020 net income(loss).2. Now assume that Syer does account for its NOL under the CARES Act. Prepare the appropriate journal entry to record Syer's2020 income taxes, and indicate Syer's 2020 net income(loss).Complete this question by entering your answers in the tabs below.Req 1AView transaction listReq 18Prepare the appropriate journal entry to record Syer's 2020 income taxes.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers inmillions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).Req 1AJournal entry worksheetShow Transcribed TextA<201950Req 2AView transaction listAReq 1B2020$ (800)Complete this question by entering your answers in the tabs below.Journal entry worksheetTransaction1Req 2ANote: Enter debits before credits.Req 28Prepare the appropriate journal entry to record Syer's 2020 income taxes.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers inmillions rounded to 2 decimal places (1.e., 5,500,000 should be entered as 5.50).....Reg 28General JournalJRecord the journal entry to record Syer's 2020 income taxescDebitCredit

Tax-deferred means you don't pay taxes until you withdraw your funds, instead of paying them upfront…

Syer Company reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in millions): 2019 2017 $ 200 se 2016 $ 400) 2018 se 2020 $ (800) Syer's 2020 NOL is driven by an unfortunate obsolescence of its primary product. Given great uncertainty in Syer's future profitability. Syer's management does not believe it is more likely than not that it will be able to realize deferred tax assets in future years. Syer's federal tax rate decreased from 35% to 21% starting in 2018. Required: 1. Assume that Syer does not account for its NOL under the CARES Act. Instead, Syer accounts for its NOL using the general requirement that NOLS be carried forward. Prepare the appropriate journal entry to record Syer's 2020 income taxes, and indicate Syer's 2020 net income(loss) 2. Now assume that Syer does account for its NOL under the CARES Act. Prepare the appropriate journal entry to record Syer's 2020 income taxes, and indicate Syer's 2020 net income(loss).

Syer Company reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in millions): 2019 2017 $ 200 se 2016 $ 400) 2018 se 2020 $ (800) Syer's 2020 NOL is driven by an unfortunate obsolescence of its primary product. Given great uncertainty in Syer's future profitability. Syer's management does not believe it is more likely than not that it will be able to realize deferred tax assets in future years. Syer's federal tax rate decreased from 35% to 21% starting in 2018. Required: 1. Assume that Syer does not account for its NOL under the CARES Act. Instead, Syer accounts for its NOL using the general requirement that NOLS be carried forward. Prepare the appropriate journal entry to record Syer's 2020 income taxes, and indicate Syer's 2020 net income(loss) 2. Now assume that Syer does account for its NOL under the CARES Act. Prepare the appropriate journal entry to record Syer's 2020 income taxes, and indicate Syer's 2020 net income(loss).

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter6: Accounting Quality

Section: Chapter Questions

Problem 20PC

See similar textbooks

Similar questions

Syer Company reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in millions): 2016 2017 2018 2019 2020 $ 370) $170 $0 $0 $ (740) Syer's 2020 NOL is driven by an unfortunate obsolescence of its primary product. Given great uncertainty in Syer's future profitability, Syer's management does not believe it is more likely than not that it will be able to realize deferred tax assets in future years. Syer's federal tax rate decreased from 35% to 21% starting in 2018. Required: 1. Assume that Syer does not account for its NOL under the CARES Act. Instead, Syer accounts for its NOL using the general requirement that NOLs be carried forward. Prepare the appropriate journal entry to record Syer's 2020 income taxes, and indicate Syer's 2020 net income(loss). 2. Now assume that Syer does account for its NOL under the CARES Act. Prepare the appropriate journal entry to record Syer's 2020 income taxes, and indicate Syer's 2020 net income(loss).
Pacman Ltd commenced business in 2015. For the year-ending 31/12/2016, they incur a loss of $2.2 million. It is not anticipated that there will be further losses as the company becomes more established in the market and will generate taxable profit in subsequent years. Profits before tax for subsequent years are: 2017: $560,000 2018: $890,000 2019: $970, 000 There are no temporary differences between carrying value of assets or liabilities. Tax rate is 30%. Prepare journal entries for 2017, 2018 and 2019
Northwestern Ocean Lapidary Inc. has been in business since 2015. However, during the 2020 pandemic, the company suffered a large net operating loss. See below. Despite a bad 2020, the company expect to turn a profit in 2021 and in subsequent years. Below you will see the actual taxable income from 2018 to 2021. You will also see the company's expected taxable income from 2022 to 2025. Under current tax laws the company was unable to carry back the NOL in 2020. However, the company applied the NOL CF to offset all taxable income in 2021. Taxable Income 2018 2$ 144,000 2019 $ 252,000 2020 $ (876,000) 2021 $ 72,000 2022* 2$ 204,000 2023* $ 264,000 2024* $ 312,000 2025* 2$ 420,000 *Expected Existing and future enacted tax rates are as follows: 21% in 2018 to 2021, 25% in 2022 and 2023, 28% in 2024, and 32% in 2025 and all years thereafter. What is the DTA the company will report on its 2021 balance sheet that corresponds to the NOL Carry Foward? 227,160 353,880 212,040 212,040 None of the…
(NOL Carryback and Carryforward, Valuation Account versus No Valuation Account) Spamela Hamderson Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. (Assume the carryback provision is used for a net operating loss.) Year Pretax Income (Loss) Tax Rate 2015 $120,000 34% 2016 90,000 34 2017 (280,000) 38 2018 220,000 38 The tax rates listed were all enacted by the beginning of 2015.Instructions(a) Prepare the journal entries for the years 2015–2018 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryback and carryforward, assuming that at the end of 2017 the benefits of the loss carryforward are judged more likely than not to be realized in the future.(b) Using the assumption in (a), prepare the income tax section of the 2017 income statement beginning with the line “Operating loss before income taxes.”(c) Prepare the journal entries for 2017 and 2018, assuming…
Horner Corporation has a deferred tax asset at December 31, 2015 of $80,000 due to the recognition of potential tax benefits of an operating loss carryforward. The enacted tax rates are as follows: 40% for 2012–2014; 35% for 2015; and 30% for 2016 and thereafter. Assuming that management expects that only 60% of the related benefits will actually be realized, a valuation account should be established in the amount of: a. $80,000 b. $32,000 c. $28,000 d. $24,000
(NOL Carryback and Carryforward, Valuation Account Needed) Beilman Inc. reports the following pretax income (loss) for both book and tax purposes. (Assume the carryback provision is used where possible for a net operating loss.) Year Pretax Income (Loss) Tax Rate 2015 $120,000 40% 2016 90,000 40 2017 (280,000) 45 2018 120,000 45 The tax rates listed were all enacted by the beginning of 2015. Instructions(a) Prepare the journal entries for years 2015–2018 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryback and loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized.(b) Prepare the income tax section of the 2017 income statement beginning with the line “Operating loss before income taxes.”(c) Prepare the income tax section of the 2018 income statement beginning with the line “Income…
Horner Corporation has a deferred tax asset at December 31, 2015 of $80,000 due to the recognition of potential tax benefits of an operating loss carryforward. The enacted tax rates are as follows: 40% for 2012-2014; 35% for 2015; and 30% for 2016 and thereafter. Assuming that management expects that only 60% of the related benefits will actually be realized, a valuation account should be established in the amount of: a. $80,000 b. $32,000 C. $28,000 d. $24,000 Use the following information for questions 5 and 6. Rowen, Inc. had pre-tax accounting income of $1,672,000 and a tax rate of 40% in 2015, its first year of operations. During 2015 the company had the following transactions: 4. Received rent from Jane, Co. for 2016 Municipal bond income Depreciation for tax purposes in excess of book depreciation Installment sales revenue to be collected in 2016 5. For 2015, what is the amount of income taxes payable for Rowen, Inc? $603,200 $654,400 $686,400 $772,800 a. b. $64,000 $80,000…
Norfolk Southern operates in an industry for which NOL carryback is not allowed, and had the following pretax income (loss) over its first three years of operations 2019 $ 1,200,000 2020 (900,000 ) 2021 1,500,000 For each year there were no deferred income taxes and the tax rate was 25%. No valuation account was deemed necessary for the deferred tax asset as of December 31, 2020. What was Norfolk Southern's income tax expense in 2021?
In 20X6, Dalia Corp., a calendar fiscal-year company, discovered that depreciation expense was erroneously overstated $68,000 in both 20X4 and 20X5 for financial reporting purposes. Net income in 20X6 is correct. The tax rate is 35%. The error was made only for financial reporting, affecting depreciation and deferred income tax accounts. CCA had been recorded correctly, and thus there will be no change in taxes payable. Additional information: Z0X6 Beginning retained earnings $456,000 zexs $432,500 Earnings (includes error in 20x5) Dividends declared 85,800 62,500 96,400 72,900 Required: 1. Record the entry in 20X6 to correct the error. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.) Answer is not complete. General Journal Debit Credit 136,000 23,800x 112,200x No 1 Date 20X6 Deferred income tax liability Retained earnings, error correction 2. Prepare the comparative retained earnings section of the statement of changes…
In 20X6, Dalia Corp., a calendar fiscal-year company, discovered that depreciation expense was erroneously overstated $67,000 in both 20X4 and 20X5 for financial reporting purposes. Net income in 20X6 is correct. The tax rate is 25%. The error was made only for financial reporting, affecting depreciation and deferred income tax accounts. CCA had been recorded correctly, and thus there will be no change in taxes payable. Additional Information: 20X6 20X5 Beginning retained earnings $454,000 $430,400 Earnings (includes error in 20X5) Dividends declared 85,400 95,900 62,200 72,300
In 20X6, Dalia Corp., a calendar fiscal-year company, discovered that depreciation expense was erroneously overstated $67,000 in both 20X4 and 20X5 for financial reporting purposes. Net income in 20X6 is correct. The tax rate is 25%. The error was made only for financial reporting, affecting depreciation and deferred income tax accounts. CCA had been recorded correctly, and thus there will be ho change in taxes payable. Additional information: 20X6 20X5 Beginning retained earnings $454,000 Earnings (includes error in 20X5) Dividends declared 85,400 62,200 $430,400 95,900 72,300 Required: 1. Record the entry in 20X6 to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the entry for 20X6 to correct the error.
13. Pinnacle West operates in an industry for which NOL carryback is not allowed, and had the following pretax income (loss) over its first three years of operations 2019 $ 1,200,000 2020 (900,000 ) 2021 1,500,000 For each year there were no deferred income taxes and the tax rate was 25%. No valuation account was deemed necessary for the deferred tax asset as of December 31, 2020. What was Pinnacle West's income tax expense in 2021? Multiple Choice 240,000. 160,000. 375,000 480,000.