In its first three years of operations Carlos Productions, a musical production company, reported the following operating income (loss) amounts: 2019 $ 450,000 2020 (1,000,000 ) 2021 1,800,000 There were no other deferred income tax amounts in any year. The enacted income tax rate was 25% in 2020 and 30% thereafter. In its 2020 balance sheet, what amount of deferred tax asset should Carlos report relevant to the NOL? (It concludes that no valuation allowance is necessary.)

Explanation:

                                      Temporary Difference

2020 Loss                    $(1,000,000)*25%=$250,000

The $250,000 is deductible temporary difference and will be recorded as

   Deferred Tax Asset Dr.$250,000

   Deferred Tax Income  Cr.$250,000

It is given in question that company has $1.8 million profits in 2021, therefore in such case deferred tax asset is recorded as there is certain that company will have profits in future.

you can lose ranking 2 ways.

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you can put this in your 11 sentence summary

" most of the money would be invested in innovation, economic convergence."