The Dot Corporation Has Changed Its Year-End from a Calendar

question 73

Multiple Choice

The Dot Corporation has changed its year-end from a calendar year-end to July 31.The income for its short period from January 1 to July 31 is $35,000.The tax for this short period is:

• A)$5,250
• B)$5,833
• C)$9,000
• D)$10,000

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Definitions:

Exchange Rates

The value of one currency for the purpose of conversion to another, determining how much foreign currency can be obtained with a specific amount of domestic currency.

Operating Expense

Costs associated with the day-to-day operations of a business, excluding costs related to production or direct operations.

Hedging Transactions

Financial strategies used by companies to protect against potential losses caused by fluctuations in market prices, interest rates, or currency exchange rates.

Functional Currency

The primary currency of the primary economic environment in which an entity operates and carries out its transactions.