Question

Given the following for the XYZ Company:

Year Pre-Tax Net Income (Loss) Tax Rate2015 S10,000 20%2016 8,000 20%2017 (20,000) 20% 2018 2,000 20%
Assume XYZ does not elect the carryback provision in 2017 and that future income is not "more likely than not."
Reported 2017 Net Loss is:______.
a. $16,400
b. $15,000
c. $16,000
d. $4,000
e. $20,000

Answer 1

e. $20,000

Step-by-step explanation:

Since in the question it is mentioned that the company has the net loss for the year 2017 is $20,000 so the same is to be reported for the year 2017

Also no election of the provision related to carryback for the year 2017 could be considered

Therefore in the given case, the amount of $20,000 would be recognized and reported as a net loss

Hence, the correct option is e. $20,000