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Question : The Bookbinder Company has made $200,000 before taxes during each

The Bookbinder Company has made $200,000 before taxes during each of the last 15 years, and it expects to make $200,000 a year before taxes in the future. However, in 2016 the firm incurred a loss of $575,000. The firm will claim a tax credit at the time it files its 2016 income tax return, and it will receive a check from the U.S. Treasury. Show how it calculates this credit, and then indicate the firm's tax liability for each of the next 5 years. Assume a 35% tax rate on all income to ease the calculations. Enter your answers as positive values. If an amount is zero, enter "0". JUST THE BOLD BELOW PLEASE

Total check from U.S. Treasury $   140000

Firm's tax liability2017:    $   __?______2018:    $   ___?_____2019:    $   ____?_____2020:    $   700002021:    $ 70000

Prior Years

2014

2015

Profit earned

$ 200000

$   200000

Carry-back credit

   200000

   200000

Adjusted profit

$   0

$   0

Tax previously paid (35%)

   70000

   70000

Tax refund: Taxes previously paid

$   70000

$   70000

 

 

Solution
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Finance 4 Months Ago 53 Views
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