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Tobac Company reported an operating loss of $132,000 for financial reporting and tax purposes
in 2021. The enacted tax rate is 25% for 2021 and all future years. Assume that Tobac operates
in an industry for which NOL carryback is allowed and elects a loss carryback. No valuation
allowance is needed for any deferred tax assets. Taxable income, tax rates, and income taxes paid
in Tobac's first four years of operations were as follows: Required: 1.) Prepare a compound
journal entry to record Tobac's tax provision for the year 2021. Show well-labeled computations.
2.) Compute Tobac's net loss for 2021 .

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Tobac Company reported an operating loss of $132,000 for financial re.pdf

  • 1. Tobac Company reported an operating loss of $132,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25% for 2021 and all future years. Assume that Tobac operates in an industry for which NOL carryback is allowed and elects a loss carryback. No valuation allowance is needed for any deferred tax assets. Taxable income, tax rates, and income taxes paid in Tobac's first four years of operations were as follows: Required: 1.) Prepare a compound journal entry to record Tobac's tax provision for the year 2021. Show well-labeled computations. 2.) Compute Tobac's net loss for 2021 .