ACCTG415 Study Guide - Quiz Guide: Income Statement, Expected Return, Deferred Tax
8 Apr 2014
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Acctg 415 - solutions for quiz #2 (2013, winter) The first year available for the loss carryback is 2010. After carrying the loss back over 3 years, the firm still has an unused amount of ,800,000 that it can carry forward for up to 20 years. This unused loss gives rise to a potential future tax benefit of ,000 (= Because it is probable that the firm will realize this deferred (future) tax benefit, it is recognized in 2013. Current income tax benefit (due to loss carryback) Deferred income tax benefit (due to loss carryforward) The firm carries the loss back over 3 years first and will receive a tax refund of ,105,000, as shown in. Then, the firm can carry the unused amount of ,800,000 forward for up to 20 years. This unused loss gives rise to a potential deferred tax benefit of ,000 (= 1,800,000 35%).
