Question
What booktax differences in year 1 and year 2 associated with its capital gains and losses would ABD Incorporated report in the following alternative scenarios?
What booktax differences in year 1 and year 2 associated with its capital gains and losses would ABD Incorporated report in the following alternative scenarios? Identify each booktax difference as favorable or unfavorable and as permanent or temporary.
a.
| Year 1 | Year 2 | |
|---|---|---|
| Capital gains | $ 20,000 | $ 5,000 |
| Capital losses | 8,000 | 0 |
|
b.
| Year 1 | Year 2 | |
|---|---|---|
| Capital gains | $ 8,000 | $ 5,000 |
| Capital losses | 20,000 | 0 |
|
c.
| Year 1 | Year 2 | |
|---|---|---|
| Capital gains | $ 0 | $ 50,000 |
| Capital losses | 25,000 | 30,000 |
|
D. Answer for year 7 only.
| Year 1 | Years 2 - 6 | Year 7 | |
|---|---|---|---|
| Capital gains | $ 0 | $ 0 | $ 15,000 |
| Capital losses | 10,000 | 0 | 0 |
|
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Financial accounting
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel
IFRS Edition
9781119153726, 978-1118285909
