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Elodia [21]
3 years ago
6

During 2021, its first year of operations, Baginski Steel Corporation reported a net operating loss of $388,000 for financial re

porting and tax purposes. The enacted tax rate is 25%. Required:
1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight of available evidence suggests that future taxable income will be sufficient to benefit from future deductible amounts arising from the net operating loss carryforward.
2. Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss.
Business
1 answer:
kipiarov [429]3 years ago
3 0

Explanation:

The journal entry is as follows:

1. Deferred tax assets  A/c Dr

           To Income tax benefit - Operating loss  A/c

(Being the income tax benefit is recorded)

The computation is shown below:

= Net operating loss × enacted tax rate

= $388,000 × 25%

= $97,000

2. Now the lower portion of the 2021 income statement is presented below:

Net operating loss before income tax     $388,000

Less:  Income tax benefit - Operating loss  -$97,000

Net loss                                                          $291,000

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6 0
1 year ago
1. If Bodin Company plans to sell 480,000 units during the year, compute the number of units the firm would have to manufacture
Dmitriy789 [7]

Answer:

450,000 Units

Explanation:

The complete part of the question is as below:

Bodin Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are planned for the year 20x1. Two units of raw material are required to produce each unit of finished product.

                             January 1  December 31

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Work in process   12,000    12,000  

Finished goods   80,000    50,000

Solution:

Units to be manufactured to sell 480,000 Units = Sales + Closing Inventroy - Opening Inventory

= 480,000 + 50,000 - 80, 000 = 450, 000 Units

The number of units Bodin would have to manufacture is 450,000 Units

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3 years ago
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tamaranim1 [39]

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