FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- In 2020, Livernois Corporation had net income from operations of $100,000. In addition, Livernois recognized a long-term capital gain of $25,000 a short-term capital gain of $5,000 and a short-term capital loss of $45,000. Which of the following statements is correct? Select one: a. Livernios Corporation will have taxable income in 2020 of $100,000 and will have a net capital loss of $15,000 that can be carried back 3 years and forward 5 years. b. Livernois Corporation will have taxable income of $125,000 and will have a net capital loss of $40,000 that can be carried back 3 years and forward 5 years. c. Livernois Corporation may deduct $30,000 of the capital loss from operating income in 2020. d. Livernois Corporation will have taxable income of $85,000 for 2020. e. None of the above.arrow_forwardRequired information [The following information applies to the questions displayed below.] Hafnaoui Company reported pretax net income from continuing operations of $903,500 and taxable income of $712,500. The book-tax difference of $191,000 was due to a $242,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $117,000 due to an increase in the reserve for bad debts, and a $66,000 favorable permanent difference from the receipt of life insurance proceeds. b. Compute Hafnaoui Company's deferred income tax expense or (benefit). Note: Enter all numbers as a positive number and indicate whether a deferred tax expense or a deferred tax benefit. X Answer is complete but not entirely correct. Deferred income tax expense $ 712,500arrow_forwardDuring the current year, Dale Corporation sold a segment of its business at a gain of $315,000.Until it was sold, the segment had a current period operating loss of $112,500. The company had$1,275,000 from continuing operations for the current year.Prepare the lower part of the income statement, beginning with the $1,275,000 income fromcontinuing operations. Follow tax allocation procedures, assuming that all changes in incomeare subject to a 20% income tax rate. Disregard earnings per share disclosures. (Round all calculations to nearest dollar amount.)arrow_forward
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