Answer:
Net loss in 2018 reported in Puritan’s income statement = $360,000
Explanation:
Net Loss:
Net loss is the amount by which a company's total costs are more than its total sales during a particular period.
Formula:
Net loss = -taxable income + Income tax benefit
As taxable income for 2018 = $600,000 and Puritan's tax rate is 40% for all years
Therefore by putting the values in the above formula, we get
Net loss in 2018 in Puritan’s income statement = -$600,000 + ($600,000 * 40%)
Net loss in 2018 reported in Puritan’s income statement = -$600,000 + 1500000
Net loss in 2018 to be reported in Puritan’s income statement = $360,000
