Northwestern Ocean Lapidary Inc. has been in business since 2015. However, during the2020 pandemic, the company suffered a large net operating loss. See below.Despite a bad 2020, the company expect to turn a profit in 2021 and in subsequentyears. Below you will see the actual taxable income from 2018 to 2021.You will also see the company's expected taxable income from 2022 to 2025.Under current tax laws the company was unable to carry back the NOL in 2020.However, the company applied the NOL CF to offset all taxable income in 2021.Taxable Income20182$144,0002019$252,0002020$(876,000)2021$72,0002022*2$204,0002023*$264,0002024*$312,0002025*2$420,000*ExpectedExisting and future enacted tax rates are as follows:21% in 2018 to 2021,25% in 2022 and 2023,28% in 2024, and32% in 2025 and all years thereafter.What is the DTA the company will report on its 2021 balance sheet that corresponds tothe NOL Carry Foward?227,160353,880212,040212,040None of the numerical choices shown are correct.

Name: Northwestern Ocean Lapidary Inc. has been in business since 2015. How
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Description: Northwestern Ocean Lapidary Inc. has been in business since 2015. However, during the2020 pandemic, the company suffered a large net operating loss. See below.Despite a bad 2020, the company expect to turn a profit in 2021 and in subsequentyears. Be

Deferred tax asset: Deferred tax asset is an item that appeared on the balance sheet of the company…

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What is the DTA the company will report on its 2021 balance sheet that corresponds to the NOL Carry Foward? 227,160 353,880 O 212,040 212,040 None of the numerical choices shown are correct.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter7: Losses—deductions And Limitations

Section: Chapter Questions

Problem 17P

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