A)
Income Tax Refund Receivable
123,000
Deferred Tax Asset
72,000
Income Tax Benefit
195,000
B)
Income Tax Refund Receivable
25,500
Deferred Tax Asset
72,000
Income Tax Benefit
97,500
C)
Income Tax Expense
195,000
Income Tax Payable
123,000
Deferred Tax Asset
72,000
D)
Income Tax Expense
97,500
Income Tax Payable
25,500
Deferred Tax Asset
72,000
Answer: D
Explanation: D) Expense: 325,000 × 30%. Payable: (325,000 – 240,000) × 30%. The NOL is carried back 2 years, with the remaining balance carried forward to 2016.