Question
SkylarSkylar Corporation has suffered losses for several years, and its debts total $485,000; SkylarSkylar's assets are valued at only $360,000. SkylarSkylar's creditors agree to reduce
SkylarSkylar Corporation has suffered losses for several years, and its debts total $485,000; SkylarSkylar's assets are valued at only $360,000. SkylarSkylar's creditors agree to reduce SkylarSkylar's debts by one-half in order to permit the corporation to continue to operate. SkylarSkylar's NOL carryover is $140,000.
Requirements
| a. | What impact does the reduction in debt have on SkylarSkylar's NOL? |
| b. | Is SkylarSkylar required to report any income? |
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Bank Management Text And Cases
Authors: George H. Hempel, Alan B. Coleman, Donald G. Simonson
3rd Edition
0471621781, 978-0471621782
