Question: In 2010, its first year of operations, Kimble Corp. has a $900,000 net operating loss when the tax rate is 30%. In 2011, Kimble has

In 2010, its first year of operations, Kimble Corp. has a $900,000 net operating loss when the tax rate is 30%. In 2011, Kimble has $360,000 taxable income and the tax rate remains 30%.

Instructions

Assume the management of Kimble Corp. thinks that it is more likely than not that the loss carry-forward will not be realized in the near future because it is a new company (this is before results of 2011 operations are known).

(a) What are the entries in 2010 to record the tax loss carryforward?

(b) What entries would be made in 2011 to record the current and deferred income taxes and to recognize the loss carryforward?

Step by Step Solution

★★★★★

3.37 Rating (172 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Computation of the Journal Entries Deferred tax Assets AcDr 270000 To Benefit Due ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

68-B-A-I-T (420).xlsx

300 KBs Excel File

Students Have Also Explored These Related Accounting Questions!

In 2020, its first year of operations, PRT Inc. reported a $ 500,000 loss for tax purposes. However, in 2021, Liu reported $ 200,000 taxable income. The tax rate is 25%, and is likely to remain at...

In its first year of operations Lien Corporation entered into the following transactions, among others: 1. January 1: Bought equipment, $105,000. 2. March 31: Prepaid one year's rent, $24,000. 3....

In 2016, its first year of operations, Kanbec Corporation appropriately reported basic earnings per share of $ 1.05 on its income statement. During 2017, the company instituted a share option plan...

In 2020, its first year of operations, SEA Corp. has a Php 1,000,000 net operating loss when the tax rate is 30%. The Bureau of Internal Revenue has extended to five years the carry-over period for...

In 2013, its first year of operations, The Genius Corp. had a $ 700,000 net operating loss when the tax rate was 30%. There are no differences between book (GAAP) income and taxable income. In 2013,...

In 2013, its first year of operations, The Marissa Corp. had a $ 600,000 net operating loss when the tax rate was 30 %. There are no differences between book (GAAP) income and taxable income. In...

In 2014, its first year of operations, Kimble Corp. has a $800,000 net operating loss when the tax rate is 30%. In 2015, Kimble has $350,000 taxable income and the tax rate remains 30%. Instructions...

1. In 2014, its first year of operations, Kimble Corp. has a net operating loss of $800,000 when the tax rate is 30%. In 2015, Kimble has a taxable income of $350,000 and the tax rate is still 30%....

Problem 2.Chapter 19,(10 points) Part 1: In 2017, its first year of operations, Kimble Corp. has a $900,000 net operating loss when the tax rate is 30%. In 2018, Kimble has $360,000 taxable income...

Part 1: In 2017, its first year of operations, Kimble Corp. has a $900,000 net operating loss when the tax rate is 30%. In 2018, Kimble has $360,000 taxable income and the tax rate remains 30%....

The human resources manager of your firm is worried about the amount of time and resources consumed by the budget committee annually. She believes the whole process is a waste of time and that...

Finish the following MATLAB function program: function [x1, r1, x2, r2] % Solves linear systems using the LU decomposition with pivoting % and also with the built -in solve function A\b. % Inputs: A...

Which of the following groups would be most interested in reviewing a company's financial statements? Venture capitalists Relatives of company employees Stockholders Employees of all subsidiaries

P Corporation acquired 80% of S Corporation on January 1, 2011 for $240,000 cash when S's stockholders' equity consisted of $100,000 of Common Stock and $30,000 of Retained Earnings. The difference...

The Pizza Palace offers three sizes of colasmall, medium, and largeto go with its pizza. The colas are sold for $0.80, $0.90, and $1.20, respectively. Thirty percent of the orders are for small, 50%...

Panthers Corp., a U.S. importer of wine, placed an order with an Italian supplier for 500,000 bottles of wine, at a price of Euro 15 per bottle. Relevant exchange rates are as follows: Forward Rate...

One concern held by some scientists is that while investments required to slow global climate change may be expensive, over the long term the loss of ecosystem services (pollination of crops,...

Economics Develop an original multivariate model using data from FRED (Federal Reserve Economic Data), properly document in APA and compose a two-page explanation of the model (include the original...

Describe the requirements for successfully segmenting a market.

The following discussion took place between Tony Cork, the office manager of Hallmark Data Company, and a new accountant, Cassie Miles. Cassie: Ive been thinking about our method of recording...

2. Asuma que las transacciones del mes de noviembre, para KAT. Co., son las siguientes \begin{tabular}{|l|l|l|} \hline & a. & Recibi efectivo por $60,000 de los inversionistas a cambio de acciones...

The market value balance sheet for Outbox Manufacturing is shown here. Outbox has declared a stock dividend of 20 percent. The stock goes ex dividend tomorrow (the chronology for a stock dividend is...

The most likely outcomes for a particular project are estimated as follows: Unit price: $50 Variable cost: $30 Fixed cost: $400,000 Expected sales: 39,000 units per year However, you recognize that...