Luther Industries Has Outstanding Tax Loss Carryforwards of $70 Million

question 73

Multiple Choice

Luther Industries has outstanding tax loss carryforwards of $70 million from losses over the past four years.If Luther earns $15 million per year in pre-tax income from now on,Luther will first pay taxes in

• A) 7 years.
• B) 2 years.
• C) 4 years.
• D) 5 years.

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Definitions:

Fixed Assets

Long-term tangible assets that a company uses in its operations and is not expected to consume or sell within a year.

Dividends

Payments made by a corporation to its shareholder members, distributing earnings.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically comprising the balance sheet, income statement, and cash flow statement.

Accounting Figures

Quantitative values or financial numbers that are recorded from business transactions in the financial statements.