In its first years of operations Hadley Productions reported the following operating income (loss) amounts: 2014...
In its first years of operations Hadley Productions reported the following operating income (loss) amounts:
|
2014 |
$ 431,000 |
|
2015 |
(850,000) |
There were no deferred income taxes in any year. In 2015, Hadley elected to carry back its operating loss. The enacted income tax rate was 30% in 2014 and 35% thereafter.
In 2015, what is Hadley’s Income Tax Benefit from the NOL
Homework Answers
Solution:
Income tax benefit from NOL = Income tax refund for loss carryback + Deferred tax assets for loss carryforward
= ($431,000*30%) + ($850,000 - $431,000)* 35%
= $275,950
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