In Its First Three Years of Operations Sharp Chairs Reported

question 2

Multiple Choice

In its first three years of operations Sharp Chairs reported the following operating income (loss) amounts: There were no deferred income taxes in any year. In 2012, Sharp elected to carry back its operating loss. The enacted income tax rate was 35% in 2011 and 40% thereafter. In its 2013 balance sheet, what amount should Sharp report as current income tax payable?

• A)$900,000.
• B)$1,260,000.
• C)$1,440,000.
• D)$2,160,000.

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