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lara [203]
3 years ago
11

In 2018, its first year of operations, Kimble Corp. has a $740,000 net operating loss when the tax rate is 35%. In 2019, Kimble

has $290,000 taxable income and the tax rate remains 35%. Assume the management of Kimble Corp. thinks that it is more likely than not that the loss carryforward will not be realized in the near future because it is a new company (this is before results of 2019 operations are known). What are the entries in 2018 to record the tax effects of the loss carryforward?
Business
1 answer:
ivanzaharov [21]3 years ago
5 0

Answer:

Explanation:

The journal entries are shown below:

a) Deferred tax asset A/c Dr  $259,000          ($740,000 × 35%)

          To benefit due to loss carry forward $259,000      

(Being recording of the carry forward amount is done)

Benefit due to loss carry forward A/c  Dr $259,000      

        To allowance to reduce deferred tax to expected realizable value $259,000      

(Being allowance amount is recorded)

b) Income tax expense A/c Dr.  $101,500       ($290000 × 35%)

        To Deferred Tax Asset A/c $101,500  

(Being recording of current tax and deferred tax is done)

Allowance to reduce deferred tax to expected realizable value Dr $101,500  

            To benefit due to loss carry forward $101,500

(Being allowance eliminated and carry forward loss is recorded)

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Snezhnost [94]

Answer:

Tariffs increase the prices of imports, helping domestic producers, while voluntary restraints do not.

Explanation:

A tarrif is defined as a tax that is imposed by government on goods and services that are imported from another country. Tarrifs are used to discourage imports by increasing their prices compared to locally produced goods and services.

Voluntary restraint agreements is is also called voluntary export restraint. It is a restriction on the amount of goods and services that exporters are allowed to export to other countries. It is also referred to as export visa.

Tarrifs results in increase in price of goods and services while voluntary restraint agreement does not.

3 0
3 years ago
Suppose the economy is operating in long-run equilibrium and a positive demand shock hits. We expect a short-run increase in rea
Pepsi [2]

Answer:

The correct answer is: an expansionary gap; decrease the money supply.

Explanation:

An expansionary gap is when genuine output surpasses potential output. At the end of the day, the economy is incidentally working over its long-run potential as estimated by real GDP.

3 0
3 years ago
Zero Corp's total common equity at the end of last year was $350,000 and its net income was $70,000. What was its ROE
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Answer:

ROE = 20%

Explanation:

Given:

Common equity = $350,000

Net income = $70,000

Find:

ROE

Computation:

ROE = [Net income/Common equity]100

ROE = [$70,000/$350,000]100

ROE = 20%

5 0
3 years ago
What are capital gains on an investment?
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<span>income that investors earn from buying and selling investments
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3 0
3 years ago
Shaq and Kobe are parties to a business contract containing a binding arbitration clause. A dispute between Shaq and Kobe is sub
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Most likely, Shaq will ask that the court overturn the award based on the acceptance of the bribe by Pat.

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