Delta began business in 2015 and reported a $100,000 Net Operating Loss (NOL) for the current year. It has no permanent

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Delta began business in 2015 and reported a $100,000 Net
Operating Loss (NOL) for the current
year. It has no permanent or temporary book-tax differences; thus,
its taxable loss equals its book loss of
$100,000. Delta will carry forward its $100,000 NOL to future
years. The tax rate is 35%. What is the JE
for 2015 I.T. Expense?
B) What is 2015 Net Income?
C) In the last example, we determined that Delta has a DTA of
$35,000 related to the $100,000 NOL in
2015. In 2016, it decides to apply (use up) the DTA (carryforward).
The company has book income of
$200,000. No book/tax differences. So, Delta reports taxable income
of $200,000 before considering the
effect of its NOL. How much is I.T. payable for 2016?
D) What is the change in the DTA for the period 2016?
E) What is the balance of the DTA in the 2016 Balance Sheet?
F) What is the 2016 JE for I.T Expense?