Santigo, Inc. incurred their first loss during this fiscal year on both financial statement and...
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Santigo, Inc. incurred their first loss during this fiscal year on both financial statement and tax returns. Suppose there are no difference between the calculation of book income and taxable income. The net loss this year was $1,000,000, prior year's income was 12,000,000 and the applicable tax rate was 40%. What would the entry be if the government allowed the Company to carry a tax loss back to prior tax years for a full redund of prior tax paid? ?A. DR Deffered tax asset $400K, CR Tax benefit(provision) $400K. ?B. DR Current tax reveivable $400K, CR Tax benefit(provision)$400K ?C. DR Tax expense(provision) $400K, CR Current tax payable$400K ?D. DR Tax expense(provision)$400K, CR Deferred tax liability$400K ?E DR Current tax expense $400K, CR Deferred tax expnse $400K ?Would you please help me. Thanks!
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