Horner Corporation has a deferred tax asset atDecember 31, 2015 of $80,000 due to therecognition of potential tax benefits of an operatingloss carryforward. The enacted tax rates are asfollows: 40% for 2012-2014; 35% for 2015; and30% for 2016 and thereafter. Assuming thatmanagement expects that only 60% of the relatedbenefits will actually be realized, a valuationaccount should be established in the amount of:a. $80,000b. $32,000C. $28,000d.$24,000Use the following information for questions 5 and 6.Rowen, Inc. had pre-tax accounting income of$1,672,000 and a tax rate of 40% in 2015, its first year ofoperations. During 2015 the company had the followingtransactions:4.Received rent from Jane, Co. for 2016Municipal bond incomeDepreciation for tax purposes in excess of bookdepreciationInstallment sales revenue to be collected in 20165.For 2015, what is the amount of income taxespayable for Rowen, Inc?$603,200$654,400$686,400$772,800a.b.$64,000$80,000$40,000$108,000d.

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Horner Corporation has a deferred tax asset at December 31, 2015 of $80,000 due to the recognition of potential tax benefits of an operating loss carryforward. The enacted tax rates are as follows: 40% for 2012-2014; 35% for 2015; and 30% for 2016 and thereafter. Assuming that management expects that only 60% of the related benefits will actually be realized, a valuation account should be established in the amount of: a. $80,000 b. $32,000 C. $28,000 d. $24,000

Horner Corporation has a deferred tax asset at December 31, 2015 of $80,000 due to the recognition of potential tax benefits of an operating loss carryforward. The enacted tax rates are as follows: 40% for 2012-2014; 35% for 2015; and 30% for 2016 and thereafter. Assuming that management expects that only 60% of the related benefits will actually be realized, a valuation account should be established in the amount of: a. $80,000 b. $32,000 C. $28,000 d. $24,000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter7: Losses—deductions And Limitations

Section: Chapter Questions

Problem 70IIP

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