Cullumber Corporation reported the following results for its first three years of operation: 2020 income (before income taxes) 2021 loss (before income taxes) 2022 income (before income taxes) $190000 (1600000) 1900000 There were no permanent or temporary differences during these three years. Assume a corporate tax rate of 20% for 2020 and 2021, and 30% for 2022. Assuming that Cullumber elects to use the carryback provision, what income (loss) is reported in 2021? (Assume that any deferred tax asset recognized is more likely than not to be realized.)
Cullumber Corporation reported the following results for its first three years of operation: 2020 income (before income taxes) 2021 loss (before income taxes) 2022 income (before income taxes) $190000 (1600000) 1900000 There were no permanent or temporary differences during these three years. Assume a corporate tax rate of 20% for 2020 and 2021, and 30% for 2022. Assuming that Cullumber elects to use the carryback provision, what income (loss) is reported in 2021? (Assume that any deferred tax asset recognized is more likely than not to be realized.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vishnu
Transcribed Image Text:Cullumber Corporation reported the following results for its first three years of operation: 2020 income (before income taxes)
2021 loss (before income taxes) 2022 income (before income taxes) $190000 (1600000) 1900000 There were no permanent
or temporary differences during these three years. Assume a corporate tax rate of 20% for 2020 and 2021, and 30% for 2022.
Assuming that Cullumber elects to use the carryback provision, what income (loss) is reported in 2021? (Assume that any
deferred tax asset recognized is more likely than not to be realized.)
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