Assume that The Bell Company operates in an industry for which NOL carryback is allowed. The Bell Company had the following operating results: Year Income (loss) Tax rate Income tax 2018 40,000 25 % 10,000 2019 20,000 25 % 5,000 2020 50,000 30 % 15,000 2021 (60,000 ) 30 % 0 What is the income tax refund receivable

$23,000

Explanation:

The computation of the income tax refund receivable is shown below:

Income tax refund receivables = (Loss carry back to year 2017 × Tax rate for year 2017) + (Loss carry back to year 2018 × Tax rate for 2018)

= ($20,000*35%) + ($40,000*40%)

= $7,000 + $16,000

= $23,000

We simply applied the above formula so that the income tax refund receivable is to be computed