Question
no deferred tax asset was recognized in the year 1 financial statements by the chaise company when a loss from discontinued segments was carried forward for tax purposes. chaise had no temporary differences. the tax benefit of the loss carried forward reduced current taxes payable on year 2 continuing operations. the year 2 financial statements would include the tax benefit from the loss brought forward in income from continuing operations. gain or loss from discontinued segments. owners' equity. cumulative effect of accounting changes.
Answer
The year 2 financial statements would include the tax benefit from the loss brought forward in income from continuing operations.
- Q: Was a deferred tax asset recognized in year 1 financial statements? A: No, the Chaise company did not recognize any deferred tax asset in the year 1 financial statements.
- Q: Was there any temporary differences? A: No, Chaise had no temporary differences.
- Q: How did the tax benefit of the loss carried forward affect year 2 financial statements? A: The tax benefit of the loss carried forward reduced current taxes payable on year 2 continuing operations.
- Q: What would be included in year 2 financial statements based on the given information? A: The year 2 financial statements would include the tax benefit from the loss brought forward in income from continuing operations.