20-21. Wilcox Corporation reported the following results for its first three years of operation: ...
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Accounting
| 20-21. Wilcox Corporation reported the following results for its first three years of operation: | |||||
| 2014 income (before income taxes) | $200,000 | ||||
| 2015 loss (before income taxes) | -1,800,000 | ||||
| 2016 income (before income taxes) | 2,000,000 | ||||
| There were no permanent or temporary differences during these three years. Assume a corporate tax rate of 40% for 2014, 2015 and 2016. | |||||
| 20 | Assuming that Wilcox elects to use the carryback provision, what income (loss) is reported in 2015? (Assume that any deferred tax asset recognized is more likely than not to be realized.) | ||||
| a. | ($1,800,000) | ||||
| b. | $ -0- | ||||
| c. | ($1,720,000) | ||||
| d. | ($1,100,000) | ||||
| 21 | Assuming that Wilcox elects to use the carryforward provision and not the carryback provision, what is the change in deferred tax asset reported in 2015? | ||||
| a. | $720,000 | ||||
| b. | $800,000 | ||||
| c. | $ -0- | ||||
| d. | $640,000 | ||||
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