Warren Corporation began operations in 2005 and had operating losses of $400,000 in 2006 and $300,000 in 2007. For the year ended December 31, 2008, Warren had a pretax financial income of $600,000. For 2006 and 2007, assume an enacted tax rate of 30 percent, and for 2008 a 35 percent tax rate. There were no temporary differences in any of the years. In Warren's 2008 income statement, how much should be reported as income tax expense? Answer a. $0 b. $30,000 c. $180,000 d. $210,000 Analysis of the assets and liabilities of Marie Corp. on December 31, 2008, disclosed assets with a tax basis of $1,000,000 and a book basis of $1,300,000. There was no difference in the liability basis. The difference in asset basis arose from temporary differences that would reverse in the following years: 2009 ............................ $80,000 2010 ............................ 70,000 2011 ............................ 72,000 2012 ............................ 40,000 2013 ............................ 38,000 The enacted tax rates are 30 percent for the years 2008-2011 and 35 percent for 2012-2015 The total deferred tax liability on December 31, 2008, should be Answer a. $105,000. b. $93,900. c. $90,000. d. $69,000. The Kelso Company had the following operating results: Year Income (loss) Tax rate Income tax 2009 30,000 35% 10,500 first year of operations 2010 45,000 30% 13,500 2011 (60,000) 30% 0 What is the income tax refund receivable? Answer $18,000 $19,500 $18,750 $24,000