Puritan Corp. reported the following pretax accounting income and taxable income

Question

Puritan Corp. reported the following pretax accounting income and taxable income for its first three years of operations:

Puritan's tax rate is 38% for all years. Puritan elected a loss carryback.

As of December 31, 2016, Puritan was certain that it would recover the full tax benefit of the NOL that remained after the operating loss carryback.

What did Puritan report on December 31, 2016, as the deferred tax asset for the NOL carryforward?

$85,070.

$ 0.

$85,500.

$293,740.

Puritan Corp. reported the following pretax accounting income and taxable income for its first three years of operations:

Explanation / Answer

NOL for 2016 $ -574,000 Less: Income from 2015 $   349,000 Net NOL Left after carry back $ -225,000 Deffered tax asset for the NOL carry forward at Tax rate of 38% = 225000 x x.38 $     85,500

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