Financial information related to Unip Limited's ("UL")2013 and 2014 fiscal year is:
UL's year-end is December 31.Prior to 2014,UL did not have any losses.The deferred tax liability account at the beginning of 2013 is $672,000.The tax rate in 2013 and 2014 is 40%.
Required:
1.a)Prepare the tax entry for 2013 and 2014.Assume UL claims the maximum CCA in 2014 and carries back the 2014 loss to 2013.
b)What is the balance in the deferred tax asset/liability account on December 31,2014?
2.a)Prepare the 2013 and 2014 tax journal entries assuming the following:
In 2014 UL does not claim any CCA,the 2014 loss is carried back to 2013 and any unused losses will be carried forward.UL believe it is more likely than not (probability 50%)that the unused loss carry forward will be utilized in the future.The pre-tax operating loss in 2014 is $3,432,000.Also,when filing the 2014 tax return,UL also re-files the 2013 return to eliminate the CCA claimed that year.
b)Under the assumptions in a),what is the balance in the deferred tax asset/liability account on December 31,2014?

Question

Financial information related to Unip Limited's ("UL")2013 and 2014 fiscal year is: 
 UL's year-end is December 31.Prior to 2014,UL did not have any losses.The deferred tax liability account at the beginning of 2013 is $672,000.The tax rate in 2013 and 2014 is 40%.
Required:
1.a)Prepare the tax entry for 2013 and 2014.Assume UL claims the maximum CCA in 2014 and carries back the 2014 loss to 2013.
b)What is the balance in the deferred tax asset/liability account on December 31,2014?
2.a)Prepare the 2013 and 2014 tax journal entries assuming the following:
In 2014 UL does not claim any CCA,the 2014 loss is carried back to 2013 and any unused losses will be carried forward.UL believe it is more likely than not (probability > 50%)that the unused loss carry forward will be utilized in the future.The pre-tax operating loss in 2014 is $3,432,000.Also,when filing the 2014 tax return,UL also re-files the 2013 return to eliminate the CCA claimed that year.
b)Under the assumptions in a),what is the balance in the deferred tax asset/liability account on December 31,2014?

Quizplus · Accepted Answer

The Answer of Financial information related to Unip Limited's ("UL")2013 and 2014 fiscal year is: 
 UL's year-end is December 31.Prior to 2014,UL did not have any losses.The deferred tax liability account at the beginning of 2013 is $672,000.The tax rate in 2013 and 2014 is 40%.
Required:
1.a)Prepare the tax entry for 2013 and 2014.Assume UL claims the maximum CCA in 2014 and carries back the 2014 loss to 2013.
b)What is the balance in the deferred tax asset/liability account on December 31,2014?
2.a)Prepare the 2013 and 2014 tax journal entries assuming the following:
In 2014 UL does not claim any CCA,the 2014 loss is carried back to 2013 and any unused losses will be carried forward.UL believe it is more likely than not (probability > 50%)that the unused loss carry forward will be utilized in the future.The pre-tax operating loss in 2014 is $3,432,000.Also,when filing the 2014 tax return,UL also re-files the 2013 return to eliminate the CCA claimed that year.
b)Under the assumptions in a),what is the balance in the deferred tax asset/liability account on December 31,2014?

Financial Information Related to Unip Limited's ("UL")2013 and 2014 Fiscal