Syer Company reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in millions): 2019 2017 $ 200 se 2016 $ 400) 2018 se 2020 $ (800) Syer's 2020 NOL is driven by an unfortunate obsolescence of its primary product. Given great uncertainty in Syer's future profitability. Syer's management does not believe it is more likely than not that it will be able to realize deferred tax assets in future years. Syer's federal tax rate decreased from 35% to 21% starting in 2018. Required: 1. Assume that Syer does not account for its NOL under the CARES Act. Instead, Syer accounts for its NOL using the general requirement that NOLS be carried forward. Prepare the appropriate journal entry to record Syer's 2020 income taxes, and indicate Syer's 2020 net income(loss) 2. Now assume that Syer does account for its NOL under the CARES Act. Prepare the appropriate journal entry to record Syer's 2020 income taxes, and indicate Syer's 2020 net income(loss).
Syer Company reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in millions): 2019 2017 $ 200 se 2016 $ 400) 2018 se 2020 $ (800) Syer's 2020 NOL is driven by an unfortunate obsolescence of its primary product. Given great uncertainty in Syer's future profitability. Syer's management does not believe it is more likely than not that it will be able to realize deferred tax assets in future years. Syer's federal tax rate decreased from 35% to 21% starting in 2018. Required: 1. Assume that Syer does not account for its NOL under the CARES Act. Instead, Syer accounts for its NOL using the general requirement that NOLS be carried forward. Prepare the appropriate journal entry to record Syer's 2020 income taxes, and indicate Syer's 2020 net income(loss) 2. Now assume that Syer does account for its NOL under the CARES Act. Prepare the appropriate journal entry to record Syer's 2020 income taxes, and indicate Syer's 2020 net income(loss).
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter6: Accounting Quality
Section: Chapter Questions
Problem 20PC
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