JG Ltd. has been in business for five years and incurs a loss of $520,000 in 20x15. The company has no temporary differences. The history of the company's earnings since they began operations is as follows: Year Taxable Income (loss) Taxes paid (recovered) |20x11 $300,000 $114,000 20x12 ($150,000) (57,000) 20x13 $330,000 125,400 20x14 $80,000 30,400 The tax rate has been constant at 38%. Required: Prepare journal entries to record the recovery of taxes and any journal entries necessary for any loss carry forwards. Assume probability of recovery is greater than 50%

JG Ltd. has been in business for five years and incurs a loss of $520,000 in 20x15. The company has no temporary differences. The history of the company's earnings since they began operations is as follows: Year Taxable Income (loss) Taxes paid (recovered) |20x11 $300,000 $114,000 20x12 ($150,000) (57,000) 20x13 $330,000 125,400 20x14 $80,000 30,400 The tax rate has been constant at 38%. Required: Prepare journal entries to record the recovery of taxes and any journal entries necessary for any loss carry forwards. Assume probability of recovery is greater than 50%

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter2: Financial Statements, Cash Flow,and Taxes

Section: Chapter Questions

Problem 19P: The Bookbinder Company had 500,000 cumulative operating losses prior to the beginning of last year....

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