Babcock Company just completed its first year of operations and has a net operating loss for tax purposes of $100,000. Babcock expects to be profitable within the next two years. The enacted tax rate is 40%. Which of the following components are included in the journal entry to record the NOL carryforward? (Choose all that apply) A. credit taxes payable $40,000 OB. debit income tax expense $40,000 OC. credit income tax expense $40,000 D. debit deferred tax asset $40,000 E. credit deferred tax liability $40,000
Babcock Company just completed its first year of operations and has a net operating loss for tax purposes of $100,000. Babcock expects to be profitable within the next two years. The enacted tax rate is 40%. Which of the following components are included in the journal entry to record the NOL carryforward? (Choose all that apply) A. credit taxes payable $40,000 OB. debit income tax expense $40,000 OC. credit income tax expense $40,000 D. debit deferred tax asset $40,000 E. credit deferred tax liability $40,000
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 22P
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Transcribed Image Text:Babcock Company just completed its first year of operations and has a net operating loss for tax purposes of $100,000. Babcock expects to be profitable within the next two years. The
enacted tax rate is 40%. Which of the following components are included in the journal entry to record the NOL carryforward? (Choose all that apply)
A. credit taxes payable $40,000
OB. debit income tax expense $40,000
OC. credit income tax expense $40,000
D. debit deferred tax asset $40,000
E. credit deferred tax liability $40,000
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