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

question 71

Essay

In the first two years of operations,a company reports taxable income of $125,000 and $65,000,respectively.In the first two years,the tax rates were 44% and 48% respectively.It is now the end of the third year,and the company has a loss of $260,000 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.

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Definitions:

Ionizing Radiation

Radiation that carries enough energy to liberate electrons from atoms or molecules, thereby ionizing them.

Spent Fuel Rods

Used nuclear reactor fuel that is no longer efficient in generating power but remains radioactive and hazardous.

Depleted Uranium

Uranium with a lower content of the fissile isotope U-235 than natural uranium, used in military applications and for counterweights.