In the First Two Years of Operations,a Company Reports Taxable

question 36

Essay

In the first two years of operations,a company reports taxable income of $200,000 and $250,000,respectively.In these two years,the company paid $45,000 and $56,000,respectively,in income taxes.It is now the end of the third year,and the company has a loss of $420,000 for tax purposes.The company carries losses to the earliest year possible.The tax rate is currently 25%.
Required:
Compute the amount of income tax payable or receivable in the current (third)year.

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Definitions:

Parents

Caregivers of a child or children, biologically related or not, responsible for their upbringing and welfare.

Child Care

Supervised care, protection, and instruction of children, typically performed by someone other than the child's parents during the daytime.

Working Mothers

Mothers who engage in employment outside the home while also managing familial responsibilities.

Deadbeat Dad

A derogatory term for a father who neglects his child support obligations and parental responsibilities.