For Three Consecutive Years, 2009-2011, Twins Corporation Has Reported Income

question 54

Multiple Choice

For three consecutive years, 2009-2011, Twins Corporation has reported income before taxes of $100,000 for both financial reporting purposes and tax reporting purposes. During this time, Twins income tax rates were as follows:

In 2012, Twins' tax rate changed to 35 percent. Also in 2012, the company reported a loss for both financial reporting and tax reporting purposes of $100,000. Assuming the company uses the carryback provisions, the amount Twins' should report as an income tax refund receivable in 2012 is

• A) $20,000.
• B) $25,000.
• C) $30,000.
• D) $35,000.

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Definitions:

Distribution System

A network through which a company supplies its products or services to its customers.

Ruling Class

The social class that holds the majority of wealth, power, and influence within a society, often making and enforcing policies and decisions.

Elite Groups

A small, select group of people within society who hold a disproportionate amount of wealth, privilege, political power, or skill.

Terrorism

The use of violence and intimidation, especially against civilians, in the pursuit of political aims.