Operating Loss Tax Benefits
Tem Technology has a first-quarter operating loss of $100,000 and expects the following income for the other three quarters:
Second quarter | $ 80,000 |
Third quarter | 160,000 |
Fourth quarter | 400,000 |
Tem estimated the effective annual tax rate at 40 percent at the end of the first quarter and changed it to 45 percent at the end of the third quarter. The company has a normal seasonal pattern of losses in the first quarter and income in the other quarters.
Required
Prepare a schedule computing the tax or tax benefits that should be shown on the interim statements.
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