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Unformatted text preview: (106,998 * 10% * 39%) ii. Cash 10,000,000 Deferred income liability 10,000,000 iii. Deferred income liability 53,499 Revenue 53,499 (106,998 * 50%) Income tax expense 2,086.46 Deferred tax asset 2,086.46 (4,172.92 * 50%) iv. Income tax expense 107 Deferred tax asset 107 (10,699.80 * 50% *37%) = 1,979.46 2,086.46 1,979.46 = 107 G. i. A loss carry forward is an accounting technique that applies the current year's net operating losses to future years' profits in order to reduce tax liability. It meets the definition of an asset because of the fact that it is something that has already happened and been dealt with, but is spread out to help net income of the year that the operating loss occurred. ii. No it wouldnt, the remaing NOL would no longer be able to be used because it has expired so it would have to be taken off of the books and could not be used in any future years. Therefore it would not be counted as an asset....
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