Accounting Muckingjay Inc. opened in 2022. The company reported sales revenue of $486,000 and expenses of $574,000. The revenue is on account, and no cash has been received or paid out for expenses. There are no permanent or temporary differences, so the book loss and taxable loss will be the same. Muckingjay plans to carry forward the net operating loss (NOL). The company has a 38% tax rate, and a valuation allowance is not required. Prepare the following for 2022: a) The necessary journal entry to record the NOL carryforward. b) A partial income statement beginning with sales revenue.
Accounting Muckingjay Inc. opened in 2022. The company reported sales revenue of $486,000 and expenses of $574,000. The revenue is on account, and no cash has been received or paid out for expenses. There are no permanent or temporary differences, so the book loss and taxable loss will be the same. Muckingjay plans to carry forward the net operating loss (NOL). The company has a 38% tax rate, and a valuation allowance is not required. Prepare the following for 2022: a) The necessary journal entry to record the NOL carryforward. b) A partial income statement beginning with sales revenue.
Chapter7: Losses—deductions And Limitations
Section: Chapter Questions
Problem 70IIP
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Accounting
Muckingjay Inc. opened in 2022. The company reported sales revenue of $486,000 and expenses of $574,000. The revenue is on account, and no cash has been received or paid out for expenses. There are no permanent or temporary differences, so the book loss and taxable loss will be the same. Muckingjay plans to carry forward the net operating loss (NOL). The company has a 38% tax rate, and a valuation allowance is not required.
Prepare the following for 2022:
a) The necessary
b) A partial income statement beginning with sales revenue.
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