During the Current Year, Sparrow Corporation, a Calendar Year C

question 69

Multiple Choice

During the current year, Sparrow Corporation, a calendar year C corporation, had operating income of $425,000, operating expenses of $280,000, a short-term capital loss of $10,000, and a long-term capital gain of $25,000. How much is Sparrow's income tax liability for the year?

• A) $32,700
• B) $33,600
• C) $45,650
• D) $62,400
• E) None of these.

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Definitions:

Bottom-Up Approach

An investment strategy that starts with the analysis of individual stocks and then proceeds to the broader economy.

Operating Cash Flow

A financial metric that represents the cash generated by a company's regular business operations in a specific time frame.

Comprehensive Income

Represents the total change in equity for a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It includes all non-owner changes in equity, not just the net income.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life for accounting and tax purposes.