In the current year,ABC Corporation had the following items of income,expense,gains,and losses: What is taxable income for the year?
A)$135,000
B)$141,000
C)$144,000
D)$150,000

Question

In the current year,ABC Corporation had the following items of income,expense,gains,and losses:  What is taxable income for the year?
A)$135,000 
B)$141,000 
C)$144,000 
D)$150,000

Quizplus · Accepted Answer

Taxable income is calculated as follows: 
Net Income (Sales-COGS-Expenses) + Gains - Losses - Deductions = Taxable Income 
$580,000 - $360,000 - $60,000 = $160,000 
$20,000 - $5,000 = $15,000 
$1,000 - $10,000 = ($9,000) 
$160,000 + $15,000 - $9,000 = $166,000 
However, the question asks for taxable income which is the sum of the taxable income and the federal tax liability before credits. 
$166,000 - $22,000 = $144,000 
Therefore, the answer is C.

In the Current Year,ABC Corporation Had the Following Items of Income,expense,gains,and