The Chance Company Began Operations in 2016 And, for That

question 86

Multiple Choice

The Chance Company began operations in 2016 and, for that calendar year, reported an operating loss of $200,000. Due to sufficient verifiable positive evidence, no valuation allowance was established to reduce the deferred tax asset as of December 31, 2016. During 2017, Chance reported pretax accounting income of $375,000. Assuming an income tax rate of 35%, what should Chance record in 2017 as income tax payable at the end of 2017?

• A) $0
• B) $70,000
• C) $61,250
• D) $131,250

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