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6. Calculate the tax effect on the loss of $50 million recognized in AOCI in 2018. Additional Facts Assume that a valuation allowance of $100

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6. Calculate the tax effect on the loss of $50 million recognized in AOCI in 2018. Additional Facts Assume that a valuation allowance of $100 million is recorded as of December 31, 2018 ($150 million DTA less $50 million reversing DTLs). Further assume that the Company's projection for 2019 pretax book income of $0 is accurate, but the Company sells a component of the business and recognizes the component as aldiscontinued operation. The discontinued operations earn $20 million before tax, and the continuing operations lose $20 million before tax for a net pretax book income of $0. As described above, the Company has a full valuation allowance. Part 2 - Required: 7a. Is there a tax benefit on the loss of $20 million from continuing operations? 7b. Is there a tax provision on the $20 million of income from discontinued operations? Part 3 Interim Reporting FOCU MacBook Air 6. Calculate the tax effect on the loss of $50 million recognized in AOCI in 2018. Additional Facts Assume that a valuation allowance of $100 million is recorded as of December 31, 2018 ($150 million DTA less $50 million reversing DTLs). Further assume that the Company's projection for 2019 pretax book income of $0 is accurate, but the Company sells a component of the business and recognizes the component as aldiscontinued operation. The discontinued operations earn $20 million before tax, and the continuing operations lose $20 million before tax for a net pretax book income of $0. As described above, the Company has a full valuation allowance. Part 2 - Required: 7a. Is there a tax benefit on the loss of $20 million from continuing operations? 7b. Is there a tax provision on the $20 million of income from discontinued operations? Part 3 Interim Reporting FOCU MacBook Air

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