Question
Collins Co. began operations in 2008. The company lost money the first two years, but has been profitable ever since. The companys taxable income (EBT)
Collins Co. began operations in 2008. The company lost money the first two years, but has been profitable ever since. The companys taxable income (EBT) for its first four years are summarized below:
| Year | EBT |
| 2008 | -$7,000,000 |
| 2009 | -$5,200,000 |
| 2010 | $4,200,000 |
| 2011 | $8,300,000 |
The corporate tax rate has remained at 34%. Assume that the company has taken full advantage of the Tax Codes carry-back, carry-forward provisions, and assume that the current provisions were applicable in 2008. What is Collins tax liability for 2011?
| $114,240 | ||
| $118,320 | ||
| $103,020 | ||
| $88,740 | ||
| $102,000 |
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Principles of Finance
Authors: Scott Besley, Eugene F. Brigham
5th edition
1111527369, 978-1111527365
