In Its First Taxable Year,Platform,Inc

question 43

Multiple Choice

In its first taxable year,Platform,Inc.generated a $100,000 net operating loss and made a $10,000 cash donation to a local charity.In its second year,Platform generated $350,000 operating income and made a $20,000 donation to the same charity.Compute Platform's taxable income for its second year.

• A)$220,000
• B)$235,000
• C)$320,000
• D)$230,000

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Definitions:

Net Income

The company’s earnings remaining after total revenue has been adjusted for expenses, taxes, and other charges.

Liabilities

The financial obligations or debts a company owes to others.

Owner's Equity

The residual interest in the assets of a entity after deducting liabilities, representing what the owners own outright.

Creditors' Risk

The risk faced by lenders that borrowers may default on their debt obligations, potentially leading to financial losses.