Before Considering a Net Operating Loss Carryforward of $80 Million

question 43

Multiple Choice

Before considering a net operating loss carryforward of $80 million, Fama Corporation reported $200 million of pretax accounting and taxable income in the current year. The income tax rate for all previous years was 40%. On January 1 of the current year, a new tax law was enacted, reducing the rate to 30% effective immediately. Fama's income tax payable for the current year would be:

• A) $48 million.
• B) $28 million.
• C) $60 million.
• D) $36 million.

---

Definitions:

Males

The sex that is typically characterized by the XY chromosome configuration in humans and other species, often associated with specific physiological and reproductive functions.

Females

Refers to the sex that can bear offspring or produce eggs, distinguished biologically by the production of gametes (ova), which can be fertilized by male gametes.

Sympathetic Division

A part of the autonomic nervous system that stimulates the body's fight or flight response.

Autonomic Nervous System

The part of the nervous system that controls involuntary actions of the smooth muscles and heart and glands, regulating functions like heart rate and digestion.