Alpha company reported positive net income in year 1 and year 2 before sustaining a significant loss in year 3. all of the year 3 loss can be carried back against the income of years 1 and 2 for purposes of determining the company's year 3 income tax liability. how should the carryback be presented int he company's year 3 financial statements?

The income-tax gain will lower the loss operating on the statement of income

Explanation:

The Company has the choices of offset the income of last yea  by a method of taken  back of  year current loss, this will lead to a  payback of tax already with jurisdiction.

However, because its a gain to the company this should appear as a benefit in tax in statement of loss and profit which will decrease  the loss on the statement of income,therefore, we have the following:

Before the income tax, Operating loss x ()

The Tax expense

The Net loss after tax ()

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