Mays Industries was established in 2010. Since its inception, the company has ge

Question

Mays Industries was established in 2010. Since its inception, the company has generated the following levels of taxable income (EBT):

Assume that each year the company has faced a 40% income tax rate. Also, assume that the company has taken full advantage of the Tax Code’s carry-back, carry-forward provisions, and assume that the current provisions were applicable in 2010. What is the company’s tax liability for 2015?

Question 47 options:

$22,990

$22,800

$19,000

$15,200

$19,760

Year Taxable Income 2010 $50,000 2011 $40,000 2012 $30,000 2013 $20,000 2014 -$62,500 2015 $60,000

Explanation / Answer

2015 tax liability =EBT* tax rate

=$ 47500*40%=$19000.

Option.C)$19000.

Carry forward used =$62500

2010& 2015 EBT =$110000

EBT=$110000-62500=$47500

Thanks

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