A company had zero Taxable Income in 2010, Taxable Income of $10,000 in 2011, and a Net Operating Loss (NOL) of $20,000 in 2012. This is the company's first-ever NOL. The company thinks that it is more likely than not that it will have taxable income in the future before the tax loss carryforward would expire. The statutory tax rate is 35.0%.
A company had zero Taxable Income in 2010, Taxable Income of $10,000 in 2011, and a Net Operating Loss (NOL) of $20,000 in 2012. This is the company's first-ever NOL. The company thinks that it is more likely than not that it will have taxable income in the future before the tax loss carryforward would expire. The statutory tax rate is 35.0%.
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 3BCRQ
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Transcribed Image Text:A company had zero Taxable Income in 2010,
Taxable Income of $10,000 in 2011, and a
Net Operating Loss (NOL) of $20,000 in 2012.
This is the company's first-ever NOL. The
company thinks that it is more likely than not
that it will have taxable income in the future
before the tax loss carryforward would
expire. The statutory tax rate is 35.0%.
What is the amount of the Deferred Tax Asset
for NOLS at the end of 2012?
$7,000
$0
$10,000
$20,000
$3,500
O O O O O
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