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Dix Company reported operating income (loss) before income tax in its first three years of operations as follows: 20X1 20x2 20x3 $ 100,000 (200,000) 240,000
Dix Company reported operating income (loss) before income tax in its first three years of operations as follows: 20X1 20x2 20x3 $ 100,000 (200,000) 240,000 Dix had no permanent or temporary differences between book income and taxable income in these years. Assume a 21% tax rate for all years, and assume there is no valuation allowance. Required: 1. What amount of deferred tax asset should Dix report on its December 31, 20X2, balance sheet? 2. What amount should Dix report as a tax benefit on its 20X2 income statement? 3. What amount of taxes does Dix pay related to its 20X3 tax return? Amount 1. Deferred tax asset reported in December 31, 20X2 balance sheet 2. Tax benefit recognized in 20X2 income statement 3. Amount of taxes paid related to 20x3 tax return
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