Studios Reported a Net Capital Loss of $30,000 in Year

question 93

Multiple Choice

Studios reported a net capital loss of $30,000 in Year 5. It reported net capital gains of $14,000 in Year 4 and $27,000 in Year 6. What is the amount and nature of the book-tax difference in Year 6 related to the net capital carryover?

• A)$11,000 unfavorable.
• B)$11,000 favorable.
• C)$16,000 unfavorable.
• D)$16,000 favorable.

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Definitions:

Consumer's Risk

The probability that a defective product will pass through a quality inspection process and reach the consumer.

Defects

Imperfections, faults, or flaws in a product or process that deviate from the desired specifications or standards.

C-chart

A control chart used for monitoring the number of defects per unit in manufacturing or production processes.

Control Limits

Statistical boundaries set within control charts in process control to identify whether a process is in a state of control.