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Problem - The Bookbinder Company had $500,000 cumulative operating losses prior to the beginning of last year. It had $100,000 in pre-tax earnings last year before using the past operating losses and has $300,000 in the current year before using any past operating losses. It projects $350,000 pre-tax earnings next year.
Required -
a. How much taxable income was there last year? How much, if any, cumulative losses remained at the end of the last year?
b. What is the taxable income in the current year? How much, if any, cumulative losses remain at the end of the current year?
c. What is the projected taxable income for next year? How much, if any, cumulative losses are projected to remain at the end of next year?
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