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.

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Definitions:

Physically Attractive

A characteristic of an individual that is found to be visually appealing to others, often influenced by cultural standards and biological instincts.

Conservative Attire

Clothing that is modest, traditional, and conforms to professional and formal standards, often worn in corporate or formal settings.

Sociable

Having a predisposition to engage in social interactions, often characterized by a willingness to connect and communicate with others.

Good Looking

A term used to describe someone who is physically attractive.