Follett Company Incurred a First Quarter Operating Loss Before Income

question 43

Multiple Choice

Follett Company incurred a first quarter operating loss before income tax effect of $2,000,000.This is a normal occurrence for Follett because of seasonal fluctuations.Experience has demonstrated the income earned during the remaining quarters far exceeds the first quarter losses each year.Follett estimates its annual income tax rate will be 35 percent.What net loss should Follett report for the first quarter?

• A)$0
• B)$700,000
• C)$1,300,000
• D)$2,000,000

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Definitions:

Supply Curve

A graph showing the relationship between the price of a good and the quantity of the good that suppliers are willing to produce and sell.

Y Axis

The vertical line in a graph or chart that typically represents the dependent variable.

Equilibrium Price

The point where the volume of goods being offered equals the volume of goods being sought in terms of price.

Demand

The amount of a product or service that buyers are ready and capable of buying at different price levels over a specific time.