For 2016, Wasabi Company Has Accounting Revenues of $6,000

question 178

Multiple Choice

For 2016, Wasabi Company has accounting revenues of $6,000.However, because of temporary differences between tax and accounting, $1,000 of this is not subject to tax.If expenses are $3,000 for both tax and accounting, and the tax rate is 40%, what is the amount of tax payable to the IRS?

• A) $400
• B) $800
• C) $1,200
• D) $1,600

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Definitions:

Missing Amount

A term used in accounting and finance to denote a value that must be found within a set of numbers or financial statements when it is not explicitly provided.

Service Business

A type of business that provides intangible products, such as expertise, time, or effort, to consumers in exchange for payment.

Retail Business

A type of business that sells goods directly to consumers, typically operating from physical locations or through online platforms.

Manufacturing Business

A type of business that produces finished goods from raw materials by using various processes, machinery, and operations.