Net Operating Loss Carry forward
Taxable income and income tax rates for 2006–2011 for the company have been as follows:
|
|
Taxable |
Income Tax |
Total |
|
Year |
Income |
Rate |
Tax Paid |
|
2006 |
$ 30,000 |
30% |
$9,000 |
|
2007 |
15,000 |
35 |
5,250 |
|
2008 |
20,000 |
35 |
7,000 |
|
2009 |
(100,000) |
40 |
? |
|
2010 |
50,000 |
35 |
? |
|
2011 |
(200,000) |
30 |
? |
Make the journal entry necessary to record any net operating loss (NOL) carry forward created in 2011. The enacted tax rate for future years is 40%.