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IRISSAK [1]
3 years ago
12

Fore Farms reported a pretax operating loss of $120 million for financial reporting purposes in 2021. Contributing to the loss w

ere (a) a penalty of $12 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2021 and (b) an estimated loss of $10 million from accruing a loss contingency. The loss will be tax deductible when paid in 2022. The enacted tax rate is 25%. There were no temporary differences at the beginning of the year and none originating in 2021 other than those described above. Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2021. 2. What is the net operating loss reported in 2021 income statement? 3. Prepare the journal entry to record income taxes in 2022 assuming pretax accounting income is $125 million. No additional temporary differences originate in 2022.
Business
1 answer:
satela [25.4K]3 years ago
7 0

Answer  

The answer and procedures of the exercise are attached in a microsoft excel document.  

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.  

Download xlsx
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Charlton is the maker of a $200,000 promissory note payable to Development & Sales Corporation. Development & Sales indo
Slav-nsk [51]

Answer:

First Select Investors

Explanation:

With timely notice to the proper parties, Global Bank may collect payment on the note from First Select Investors.

Although Charlton is the maker of the $200,000 promissory note payable, and was directly issued to Development & Sales Corporation, the party that issued it to Global Bank is First Select Investors.

Hence, Global Bank has direct link to First Select Investors and will notify the later about payment of their account receivable.

7 0
3 years ago
Read 2 more answers
Juanita Corporation uses a job-order costing system and applies overhead on the basis of direct labor cost. At the end of Octobe
bezimeni [28]

Answer:

Total Cost of the Job    $

Direct materials             480

Direct labour                  150

Additional labour           100

Applied overhead          600

Total cost                        1,330

The total amount to be transferred to finished goods inventory in November is $1,330.                                

Explanation:

The total cost of the job  is the total of direct material, direct labour, additional labour and manufacturing overhead applied. The additional labour cost is considered because it is required to complete the job.

7 0
3 years ago
A savings account that pays interest every month is said to have a _______ interest period.
LuckyWell [14K]
A savings account that pays interest every month is said to have a quarterly interest period.
3 0
3 years ago
Read 2 more answers
Choose the correct statement. A. Income tax creates a deadweight loss in the markets for capital and labor. B. Income tax is a t
mixer [17]

Answer:

The correct answer is option A.

Explanation:

Income tax is a tax imposed by the government on the income earned by the individuals. This income can be from capital and labor. It creates a deadweight loss in the market for labor and capital.

Deadweight loss is the loss to economic efficiency and production caused by a tax. The imposition of a tax creates a tax wedge, this tax wedge leads to a deadweight loss. Deadweight loss due to income tax is the loss of purchasing power or reductions standard of living due to tax.  

The inefficiency or tax burden depends upon the elasticities of demand and supply. Whoever has the least elasticity will share most of the tax burden.

7 0
3 years ago
Good X and Good Y are related goods. When the price of Good X rises by 20 percent, the quantity demanded for Good Y falls by 40
ch4aika [34]

Answer:

-2

Explanation:

Good X and Y are related goods

When the price of Good X rises by 20 percent the quantity for Good Y falls by 40 percent

Therefore the cross price elasticity can be calculated as follows

= -40/20

= -2

Hence the cross price elasticity is -2

4 0
3 years ago
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