In the First Two Years of Operations, a Company Reports

question 7

Multiple Choice

In the first two years of operations, a company reports taxable income of $200,000 and $250,000, respectively. During these first two years, the tax rates were 30% and 35% 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 40%. The amount of income tax receivable in the current (third) year is:

• A)$104,000
• B)$81,000
• C)$147,500
• D)$91,000

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Definitions:

Air Pollution

The presence in or introduction into the air of a substance which has harmful or poisonous effects.

Hydrogen Ions

Positively charged ions (protons) formed when hydrogen atoms lose their electrons, often playing a significant role in chemical reactions and acidity.

Corrosive

Describing a substance that has the ability to wear away or destroy other materials through a chemical reaction, often leading to damage or deterioration.

Microbial Processes

These are biological reactions and activities carried out by microorganisms, playing critical roles in recycling nutrients in the environment.