Abdo Corporation Received Permission to Change Its Tax Year-End from December

question 54

Multiple Choice

Abdo Corporation received permission to change its tax year-end from December 31 to August 31 in 2013.Its income from January 1 through August 31 is $278,000.What is Abdo's tax liability?

• A)$91,670
• B)$94,520
• C)$108,420
• D)$141,780

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Definitions:

Deferred Income Tax Asset

A financial item on the balance sheet that results from over-payment or advance payment of taxes, which is expected to be recovered in future periods.

Income Tax Returns

Official documents filed with governmental tax authorities declaring income, expenses, and other tax-relevant information to calculate tax liability.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on income level, type of income, or jurisdiction.

Net Income

A company’s final income after deducting all expenses and taxes from its gross revenue.