Problem 18-02

Over the last five years, corporation A has been consistently profitable. Its earnings before taxes were as follows:

Year	1	2	3	4	5
Earnings	$1,300	$3,100	$4,500	$5,000	$4,000

If the corporate tax rate was 26 percent, what were the firm's income taxes for each year? Round your answers to the nearest dollar.

Year	1	2	3	4	5
Taxes	$	$	$	$	$

Unfortunately, in year 6 the firm experienced a major decline in sales, which resulted in a loss of $10,700. What impact will the loss have on the firm's taxes for each year if the permitted carry-back is two years? If the answer is zero, enter "0". Round your answers to the nearest dollar.

Year	1	2	3	4	5
New Taxes	$	$	$	$	$

Total tax refund: $