TR$17-4$ Loss Carryback$/$Carryforward$,$ Temporary Differences $($LO$17\mathrm{.}2,$ LO$17\mathrm{.}3,$ LO$17\mathrm{.}4)$:

connect

Lin Ltd$.$ reported the following:

$20$X$7($first year of operations$)$

$20$X$8$

Earnings $($loss$)$

$$90,000$

$($$$150,000)$

Depreciation $($assets have a cost of $$210,000)$

$$20,000$

$ $20,000$

$$

$$35,000$

$ $45,000$

Nondeductible expenses

$ $10,000$

$ $10,000$

Tax rate

$25\%$

$25\%$

Required:

$1.$ What is the amount of the taxable income or loss in each year?

$2.$ How much is the tax refund to be claimed in $20$X$8?$

$3.$ How much is tax expense $($recovery$)$ in $20$X$8,$ assuming that use of the loss carryforward is not probable?