Appalachian Airlines Began Operating in 2010

question 64

Multiple Choice

Appalachian Airlines began operating in 2010.The company lost money the first year but has been profitable ever since.The company's taxable income (EBT) for its first five years is listed below.Each year the company's corporate tax rate has been 40%. Assume that the company has taken full advantage of the Tax Code's carry-back,carry-forward provisions and that the current provisions were applicable in 2010.How much did the company pay in taxes in 2013?

• A)$ 688,500
• B)$ 765,000
• C)$ 800,000
• D)$ 930,000
• E)$1,023,000

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Definitions:

Horizontal Analysis

A financial analysis technique that compares historical financial data across consecutive periods to identify trends and growth patterns.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities, and equity) or income and expenses is represented as a proportion of a total account.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Horizontal Analysis

Horizontal analysis is a financial analysis technique that compares historical financial data across different periods, to identify trends and growth patterns by analyzing changes in line items.