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13 Dec 2019

Ladow Inc. incurred a $32,000 net operating loss in 2018. If Ladow's 2019 taxable income was $38,000 before NOLs, compute Ladow's 2019 NOL deduction.

Multiple Choice

$0

$25,600

$30,400

$32,000

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Jarrod Robel
Jarrod RobelLv2
17 Dec 2019
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Related questions

Net Operating Loss Carrybacks andCarryovers. In 2009, Ace Corporation reports grossincome of $200,000 (including $150,000 of profit from itsoperations and $50,000 in dividends from less-than-20%-owneddomestic corporations) and $220,000 of operating expenses. Ace’s2007 taxable income (all ordinary income) was $75,000, on which itpaid taxes of $13,750.

What is Ace’s NOL for 2009?

What is the amount of Ace’s tax refund if Ace carries back the2009 NOL to 2007?

Assume that Ace expects 2010’s taxable income to be $400,000.Ignore the U.S. production activities deduction. What electioncould Ace make to increase the tax benefit from its NOL? What isthe dollar amount of the expected benefit (if any)? Assume a 10%discount rate as a measure of the time value of money.

I need help with this one. Can somebody explain me how to do it. I think that the carry forward from NOL should be accounted too plus/minus the temporary difference, but I am not sure if I am correct. Answers $96 and $144 are incorrect.

In its first year of operations the Babco co. has a net operating loss(NOL) of $1,600 and a pretax loss of $1,360. The difference is due to a temporary difference that will reverse in the following year when the enacted tax rate is 30%. The tax rate for the current year is 40%.

1. Compute the net tax expense or benefit that Babco would report for the current year. Enter a negative number for expense and a positive number for a benefit.

2. What if Babco's pretax loss was $1,600 and its NOL was $1,360 (i.e. pretax < taxable). Compute the net tax benefit or expense.

The comparative statements of financial position of Mikos Inc. as at December 31, 2017 and 2018, and its statement of earnings for the year ended December 31, 2018, are presented below:

MIKOS INC.
Comparative Statements of Financial Position
December 31
2018 2017
Assets
Cash $ 10,600 $ 18,600
Short-term investments 72,200 40,800
Accounts receivable 76,000 32,400
Inventories, at cost 57,200 41,600
Prepaid expenses 5,600 9,200
Land 51,400 78,000
Property, plant, and equipment, net 286,400 187,000
Intangible assets 25,600 31,200
$ 585,000 $ 438,800
Liabilities and Shareholders’ Equity
Accounts payable $ 18,600 $ 43,200
Income tax payable 9,200 2,600
Accrued liabilities 11,600 -0-
Long-term notes payable 126,000 182,000
Contributed capital 232,000 68,000
Retained earnings 187,600 143,000
$ 585,000 $ 438,800
MIKOS INC.
Statement of Earnings
For the Year Ended December 31, 2018
Sales $ 898,000
Cost of sales $ 446,000
Amortization expense—intangible assets 5,600
Depreciation expense—property, plant, and equipment 34,600
Operating expenses 237,000
Interest expense 13,600 736,800
Earnings before income taxes 161,200
Income tax expense 48,360
Net earnings $ 112,840
Additional information is as follows:
a. Land was sold for cash at its carrying amount.
b. The short-term investments will mature in February 2019.
c. Cash dividends were declared and paid in 2018.
d. New equipment with a cost of $167,600 was purchased for cash, and old equipment was sold at its carrying amount.
e. Long-term notes of $18,000 were paid in cash, and notes of $38,000 were converted to shares.
1. Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2018 by using the indirect method. (Negative answers should be indicated by a minus sign.)

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