Big Bear Sporting Goods Opened in 2018 B) C) D)

question 136

Multiple Choice

Big Bear Sporting Goods opened in 2018. They reported sales revenue of $375,000 and expenses of $460,000. There are no permanent or temporary differences, so the book loss and taxable loss will be the same. Big Bear plans on carrying forward the net operating loss (NOL) . Assuming a 32% tax rate, what is the necessary journal entry in 2018 to record the NOL carryforward?

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Income Tax Refund Receivable } & 120,000 & \\
• \hline \text { Income Tax Benefit } & & 120,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | l | }
• \hline \text { Deferred Tax Asset } & 120,000 & \\
• \hline \text { Income Tax Benefit } & & 120,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Income Tax Refund Receivable } & 27,200 & \\
• \hline \text { Income Tax Benefit } & & 27,200 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Deferred Tax Asset } & 27,200 & \\
• \hline \text { Income Tax Benefit } & & 27,200 \\
• \hline
• \end{array}\]

Understand and apply the concept of utility functions in economic decision-making.

Calculate the maximum amount individuals are willing to pay for a good given their utility functions and budget constraints.

Demonstrate how to find Pareto optimal allocations of resources between public and private goods.

Analyze how changes in individuals' budgets affect their willingness to pay for goods.

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Definitions:

\(24\left(\frac{1}{2}\right)^{\frac{t}{30}}\)

An exponential function representing the decay or growth of a quantity, where 24 is the initial value, \(\frac{1}{2}\) is the base of the exponent signifying decay, and \(\frac{t}{30}\) is the exponent indicating time or another variable at which the decay occurs.

U.S. Census Bureau

The federal agency responsible for collecting and analyzing data about the American people and economy.

\(203.0(1.0107)^t\)

This expression models exponential growth or decay, depending on the context, where 203.0 is the initial quantity, 1.0107 represents the growth (or decay) rate, and \(t\) is the time variable.

Composition

The way in which a whole or mixture is made up from various parts, or in mathematics, the application of one function to another.