In the First Year of Operations, a Company Reports Taxable

question 71

Essay

In the first year of operations, a company reports taxable income of $125,000 and paid $31,250 of income taxes. It is now the end of the second year, and the company has a loss of $175,000 for tax purposes. The company's management believes it is probable the company will be able to use up its tax losses. The tax rate is currently 40%.
Required:
Compute the amounts of income tax receivable and/ or deferred income tax asset in the current (second)year.

Understand the types of bonds and their purposes in securing obligations.

Understand the concept of politics as the endeavor to gain and maintain control over the state apparatus.

Comprehend the distinctions between power, authority, and legitimacy in leadership roles.

Gain knowledge of subsistence group sizes and their compositions.

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Definitions:

Long-Term Liability

A financial obligation of a company that is due more than one year in the future.

Current Liability

Financial obligations or debts that a company is expected to pay within one year, including accounts payable, wages, and short-term loans.

Internal Controls

Methods and policies established by a company to guarantee the accuracy of finance and accounting data, encourage responsibility, and deter deceptive practices.

Cash Payments

Outflows of cash by a business to settle obligations, such as paying expenses, debts, or purchasing assets.