In Its First Four Years of Operations Peridot Jewelers Reported

question 120

Multiple Choice

In its first four years of operations Peridot Jewelers reported the following operating income (loss) amounts:
There were no other deferred income taxes in any year.In 2015,Peridot elected to carry back its operating loss.The enacted income tax rate was 40%.In its 2016 income statement,what amount should Peridot report as income tax expense?

• A)$ 80,000.
• B)$110,000.
• C)$170,000.
• D)$180,000.

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Definitions:

Residual Value

The anticipated value an asset is expected to retain at the end of its useful life, often used in calculating depreciation.

Service Life

The expected period during which an asset is considered usable and economically feasible for its intended purpose.

Depreciable Base

The cost of an asset minus its estimated salvage value, representing the total amount subject to depreciation over its useful life.

Selling Price

The amount of money for which a product or service is sold to the consumer.