Table 14-4 Crane Corporation Had Operating Income of $185,000, a Loss of Loss

question 136

Multiple Choice

Table 14-4
Crane Corporation had operating income of $185,000, a loss of $25,000 from a flood and a gain of $8,000 from the sale of a machine the business owned. You are preparing the 2017 income statement. Crane Corporation is in a 25% tax bracket.
-Refer to Table 14-4. The Income tax expense would be:

• A) $48,450
• B) $57,120
• C) $42,000
• D) $46,250

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Definitions:

U.S. Tax Court

A federal court that provides taxpayers a venue to dispute tax assessments by the IRS without having to pay the disputed amount upfront.

U.S. Court of Appeals

A level of federal courts in the United States which review decisions of lower courts, typically called circuit courts.

U.S. Court of Federal Claims

A federal court that hears monetary claims against the U.S. government.

U.S. District Court

A federal-level court in the United States where both civil and criminal cases are filed and federal laws are interpreted.