How the products had a net operating loss


Assume that last year (2011) A & A Products had a net operating loss of$50,000 and for this problem A & A Products reported tax expense for 2012 of $70,000. Also assume that in 2010 A & A Products had income of$10,000 and a tax rate of20% (ignore any earlier years). This year, 2012, A & A Products reported net income of$70,000 and a tax rate of20%. Prepare the entry that A & A Products should have made in 2011 . Prepare an entry for 2012 recording the effect on A & A Products' books ofthe 2011 NOL.

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Accounting Basics: How the products had a net operating loss
Reference No:- TGS0688886

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