KAR Ltd.has been in business for five years and incurs a loss of $320,000 in 20x15.The company has no temporary differences.The history of the company's earnings since they began operations is as follows:
The tax rate has been constant at 40%.
Required:
Prepare journal entries to record the recovery of taxes and any journal entries necessary for any loss carry forwards.Assume probability of recovery is less than 50%

Question

KAR Ltd.has been in business for five years and incurs a loss of $320,000 in 20x15.The company has no temporary differences.The history of the company's earnings since they began operations is as follows:  
The tax rate has been constant at 40%.
Required:
Prepare journal entries to record the recovery of taxes and any journal entries necessary for any loss carry forwards.Assume probability of recovery is less than 50%

Quizplus · Accepted Answer

The Answer of KAR Ltd.has been in business for five years and incurs a loss of $320,000 in 20x15.The company has no temporary differences.The history of the company's earnings since they began operations is as follows:  
The tax rate has been constant at 40%.
Required:
Prepare journal entries to record the recovery of taxes and any journal entries necessary for any loss carry forwards.Assume probability of recovery is less than 50%

KAR Ltdhas Been in Business for Five Years and Incurs a a Loss