A Company Had Taxable Income of $12 Million in Fiscal

question 57

Multiple Choice

A company had taxable income of $12 million in fiscal 2013 and paid taxes of 4.8 million; the company incurred a loss of $7 million in fiscal 2015 when the tax rate is 50%.How much refund is the company entitled to?

• A)Nil
• B)$2.8 million
• C)$3.5 million
• D)$4.8 million

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Definitions:

Multiple-Step Income Statement

A detailed financial statement that separates operating revenues and expenses from non-operating ones, providing a clear view of a company's financial performance.

Sales Discounts

Reductions in the price of goods or services that are offered by sellers to incentivize prompt payment by buyers.

Net Sales

The revenue a company earns from its sales activities, minus the costs associated with returns, compensation for faulty or missing items, and permitted discounts.

Normal Credit Balance

The usual balance side of an account, considered a credit for liability, revenue, and equity accounts.