Gene Files His Tax Return 45 Days After the Due

question 12

Multiple Choice

Gene files his tax return 45 days after the due date.Along with the return,Gene remits a check for $40,000 which is the balance of the tax owed.Disregarding the interest element,Gene's total failure to file and to pay penalties are:

• A)$400.
• B)$2,000.
• C)$3,600.
• D)$4,000.
• E)$4,400.

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Definitions:

Contingent Liability

A potential financial obligation that may occur depending on the outcome of a future event.

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the interest payments on debt over a reporting period.

Note Payable

A written agreement where one party promises to pay another party a definite sum of money either on demand or at a specified future date.

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, becomes due and payable.