In the First Two Years of Operations,a Company Reports Taxable

question 80

Essay

In the first two years of operations,a company reports taxable income of $115,000 and $165,000,respectively.In the first two years,the tax rates were 38% and 32% respectively.It is now the end of the third year,and the company has a loss of$160,000 for tax purposes.The company carries losses to the earliest year possible.The tax rate is currently 25%.
Requirement:
a.How much tax was paid in year 1 and year 2?
b.Compute the amount of income tax payable or receivable in the current (third)year.

---

Definitions:

17th Century

Referring to the period from 1601 to 1700, marked by significant cultural, political, and scientific developments across the world.

East Facade of the Louvre

The eastward-facing exterior part of the Louvre Museum in Paris, notable for its architectural design and important as the main entrance to the museum until the addition of the Pyramid.

Dutch Republic

The historical period of the Netherlands from 1581 to 1795, characterized by its economic prosperity, maritime trade dominance, and contributions to the arts and sciences.

Rachel Ruysch

A prominent Dutch painter known for her intricate and realistic still life paintings, particularly of flowers, during the late 17th and early 18th centuries.