1). Explain in detail the two alternative methods a company may use to report a net operating loss (reports a Loss Before Income Taxes).

2). The Williams Corporation, which operates on a calendar year, started its operations on January 1, 2015. Williams pay corporate income taxes at the rate of 35%

Williams Corporation has no permanent or timing differences (no differences between reported accounting profits and taxable income) in any calendar year.

Below is Williams Corporation GAAP (Accounting) Income Before Taxes for the following calendar year ends:

2015	$100,000
2016	$500,000
2017	($400,000)
2018	($300,000)
2019	$300,000

Prepare the 2017 year end journal entry for income tax expenses (benefit).

b) Assume that Williams is unable to determine if the firm will be profitable in the future when preparing the 2018 journal entry (entries). Prepare the 2018 year end journal entry (entries) for income tax expenses (benefit) .

c) Prepare the 2019 year end journal entry (entries) for income tax expenses.

3. Your firm has been conducting tax research by looking at cases settled in federal courts as a means to decide what position to take when reporting this year's taxes.

Based upon the outcome of existing tax law cases, and after consulting with the firm's auditors and attorney's, you feel there is a 75% chance that if your firm takes

this tax position when it files its US tax return, the firm will be successful if the IRS challenges this tax position. The potential benefit from taking this position in the current

year is material to the Balance Sheet and Income Statement. The tax benefit is an all or nothing tax benefit.

Each of the tax law cases to date have also upheld 100% of the tax benefit claimed by other firms related to this tax position.

a). With specific reference to the ASC for uncertain tax positions, summarize the accounting rules that apply.

b). Would the firm be able to recognize the entire tax benefit from this tax position in the current year's income statement?

4. Assume the following information for Robert Corporation for the year ended December 31, 2016:
Accounting Income Before Income Taxes							$1,000,000
Permanent Differences-Income Items Included
in the above Accounting Income Before Income Taxes Which Are Not Taxable							$100,000
under the Income Tax rules
a) Record the journal entry for income tax expense and income taxes payable under US GAAP, assuming that the
US Corporate Income Tax Rate is							35%
for the year ended December 31, 2016.

5. Assume the following information for Robert Corporation for the year ended December 31, 2016:

Accounting Income Before Income Taxes

$1,000,000

Permanent Differences-Income Items Included

in the above Accounting Income Before Income Taxes Which Are Not Taxable

$100,000

under the Income Tax rules

Timing Differences: Robert Corporation uses accelerated depreciation

methods for income tax purposes. For 2016, income tax depreciation

expense using the accelerated method was greater than

accounting (book) depreciation expense by

$100,000

a) Record the journal entry for income tax expense, income taxes payable, and deferred income taxes payable under US GAAP, assuming that the

US Corporate Income Tax Rate is

35%

for the year ended December 31, 2016.

Assume this is the first year that Robert Corporation has been in operation.