In the First Year of Operations, a Company Reports Taxable

question 66

Essay

In the first year of operations, a company reports taxable income of $225,000 and paid a tax rate of 28%. It is now the end of the second year, and the company has a loss of $375,000 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 32%.
Required:
Compute the amounts of income tax receivable and/ or deferred income tax asset in the current (second)year.

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Definitions:

Theory X

A management theory assuming that employees are naturally lazy, need to be closely supervised, and require strict control to be motivated.

Effective Leaders

Individuals who successfully inspire, influence, and guide others towards achieving shared goals through their vision, communication, and integrity.

Values

Fundamental beliefs that guide or motivate attitudes and actions.

Beliefs

Convictions or acceptances that something is true or exists, often without definitive proof.