Question
Grimes Corporation began business in 2017 and incurred losses for its first two years. In 2019, it became profitable. The following table shows Grimes taxable
Grimes Corporation began business in 2017 and incurred losses for its first two years. In 2019, it became profitable. The following table shows Grimes taxable income before consideration of its NOLs:
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|---|
| Taxable income | $ (820,000) | $ (254,000) | $ 320,000 | $ 541,000 | $ 210,000 | $ 298,000 |
Required:
Recompute Grimes taxable income for 2019 through 2022 after its allowable net operating loss deduction.
What is 2020 & 2022 NOL Deduction and Taxable Income?
Taxable income before NOL deduction NOL deduction Taxable income 2019 $ 320,000 (320,000) 0 $ 2020 $541,000 2021 2022 $210,000 $ 298,000 (168,000) $ 42,000
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
13th Edition
8120335643, 136126634, 978-0136126638
