This posting addresses carryback & carryforwards.
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(Carryback and Carryforward of NOL, No Valuation Account, No Temporary differences)
The pretax financial income (or loss) figures for Synergetics Company are as follows:
2006 $160,000
2007 250,000
2008 90,000
2009 (160,000)
2010 (350,000)
2011 120,000
2012 100,000
Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2006 and 2007 and a 40% tax rate for the remaining yers.
Prepare the journal entries for the years 2008 to 2012 to record income tax expense and the effects of the net operating loss carrybacks and carryforwards assuming Synergetics Company uses the crryback provision. All income and losses relate to normal operations. (in recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)
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Solution Summary
The solution provides all journal entries needed for carryback/carryforward and all related entries for Synergetics Company.
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