Question

In: Accounting

If the taxable income (loss) before LCF from 2016 until 2027 as following each year: -30,000...

If the taxable income (loss) before LCF from 2016 until 2027 as following each year:
-30,000
-21,000
-15,000
9,000
6,000
9,000
12,000
225,000
150,000
-30,000
90,000
240,000

in both case has tax temporary exemption for the first five years and when has no exemption.

Find the following for each year:
LCF
TI after LCF
Tax due if (15% tax rate)

Solutions

Expert Solution

For the first 5 years no need to pay taxes as Tax temparory exemption; further loss can-not be forward for thses 5 years. Details are as under:

Year Income before LCF Tax status LCF Taxable Income after LCF Tax Due
2016                           (30,000) Tax Temparory Exemption             -                                                   -               -  
2017                           (21,000) Tax Temparory Exemption             -                                                   -               -  
2018                           (15,000) Tax Temparory Exemption             -                                                   -               -  
2019                                9,000 Tax Temparory Exemption             -                                                   -               -  
2020                                6,000 Tax Temparory Exemption             -                                                   -               -  
2021                                9,000 Normal             -                                            9,000      1,350
2022                              12,000 Normal             -                                          12,000      1,800
2023                           225,000 Normal             -                                       225,000    33,750
2024                           150,000 Normal             -                                       150,000    22,500
2025                           (30,000) Normal    30,000                                                 -               -  
2026                              90,000 Normal             -                                          60,000      9,000
2027                           240,000 Normal             -                                       240,000    36,000

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