Studios Reported a Net Capital Loss of $30,000 in Year

question 82

Multiple Choice

Studios reported a net capital loss of $30,000 in year 5.It reported net capital gains of $14,000 in year 4 and $27,000 in year 6.What is the amount and nature of the book-tax difference in year 6 related to the net capital carryover?

• A)$11,000 unfavorable.
• B)$11,000 favorable.
• C)$16,000 unfavorable.
• D)$16,000 favorable.

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Definitions:

Joint Control

A situation in an arrangement where more than one party has control together, requiring unanimous consent for decision-making.

Economic Entity

An organization or unit in the economy that is capable of conducting economic activities, such as businesses or households.

Contractually Agreed

Pertains to terms, conditions, or arrangements that have been explicitly consented to by all parties involved through a formal contract.

Partial Exemption Disclosures

Disclosures that allow entities to omit certain details from financial statements under specific circumstances, provided partial information is still disclosed.