Colombe Properties Corporation Reported the Following Results for Its First

question 5

Multiple Choice

Colombe Properties Corporation reported the following results for its first three years of operations: $$\begin{array} { l r } 2019 \text { income (before income taxes) } & \$ 40,000 \\2020 \text { loss (before income taxes) } & ( 360,000 ) \\2021 \text { income (before income taxes) } & 400,000\end{array}$$ There were no permanent or reversible differences during these three years. Assume an income tax rate of 30% for 2019 and 2020, and 40% for 2021, and that any deferred tax asset recognized is more likely than not to be realized. If Colombe Properties elects to use the carryforward provisions and not the carryback provisions, what income (loss) is reported for 2020?

• A) $ 0
• B) $ (216,000)
• C) $ (232,000)
• D) $ (360,000)

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Definitions:

Rule Making Requirements

Regulations and procedures that governmental agencies need to follow to create, amend, or repeal rules and regulations.

Formal Rule Making

A regulatory process outlined by the Administrative Procedure Act where agencies create new rules with public input.

Hybrid Rule Making

A regulatory process that combines elements of both formal rulemaking proceedings and informal rulemaking proceedings.

Epidural Block

A medical procedure involving the injection of an anesthetic near the spinal cord to block pain, commonly used during childbirth.