During the Year 2009, Tosco Corporation Suffered an $800,000 Loss

question 74

Multiple Choice

During the year 2009, Tosco Corporation suffered an $800,000 loss when its factory was destroyed in a flood. Assuming the corporate income tax rate is 36%, what amount will Tosco report as an extraordinary loss on its income statement for 2009? Assume floods are not common in this area.

• A) $800,000.
• B) $512,000.
• C) $288,000.
• D) Nothing, since this does not qualify as an extraordinary item.

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Definitions:

Flossing

The act of using a thin thread to remove food and plaque from between teeth to maintain oral hygiene and prevent gum disease.

Plaque

A deposit of fatty and other substances that builds up in the inner lining of arteries, leading to atherosclerosis and potential blockage.

Waxed Floss

Dental floss coated with wax to facilitate easier sliding between teeth for the removal of plaque and food particles.

Head Lice

Parasitic insects that live on the human scalp and feed on blood, causing itching and discomfort; commonly spread by close personal contact.