Loggins Lumber Company experienced net losses during the first two years of its operations. Year...
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Loggins Lumber Company experienced net losses during the first two years of its operations. Year 3 was the companys first profitable year. Loggins uses the same accounting meth-ods for financial reporting and its tax returns. The company always elects the carryback/ carryforward option. Management examined all available evidence, both positive and negative, and has determined that it is more likely than not that all of the carryforward tax benefits are fully realizable. The following information is taken from the companys financial records for the first four years of its operations: Required a. Prepare the journal entries needed to record the tax provision for years 3 and 4. b. Prepare partial income statements for all four years. c. What is the balance of the deferred tax account at the end of year 3 and how should Loggins classify it on the balance sheet? Assume the loss carry forward will be used in year 4. View Solution: Loggins Lumber Company experienced net losses during the first two
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