Calculate the total check from us treasury

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Reference no: EM131971175

Loss Carryback and Carryforward

The Bookbinder Company has made $200,000 before taxes during each of the last 15 years, and it expects to make $200,000 a year before taxes in the future. However, in 2013 the firm incurred a loss of $525,000.

The firm will claim a tax credit at the time it files its 2013 income tax return, and it will receive a check from the U.S. Treasury.

Show how it calculates this credit, and then indicate the firm's tax liability for each of the next 5 years.

Assume a 35% tax rate on all income to ease the calculations. Enter your answers as positive values. If an amount is zero, enter "0".

Prior Years	2011	2012
Profit earned	$	$
Carry-back credit	$	$
Adjusted profit	$	$
Tax previously paid (35%)	$	$
Tax refund: Taxes previously paid	$	$

Total check from U.S. Treasury $

Firm's tax liability
2014:    $
2015:    $
2016:    $
2017:    $
2018:    $

Reference no: EM131971175

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