Omnidata uses the annualized income method to determine its quarterly federal income tax payments.It had $100,000, $50,000, and $90,000 of taxable income for the first, second, and third quarters, respectively ($240,000 in total through the first three quarters).What is Omnidata's annual estimated taxable income for the tax year as of the end of the third quarter?
A)$300,000.
B)$320,000.
C)$400,000.
D)$480,000.

Question

Quizplus · Accepted Answer

Omnidata's annual estimated taxable income is calculated by annualizing the income through the first three quarters. With $240,000 in total for the first three quarters, the average quarterly income is $240,000 / 3 = $80,000. Annualizing this gives $80,000 * 4 = $320,000. However, the question asks for the estimated taxable income as of the end of the third quarter, which is the actual income earned to date, thus $240,000. The options seem to misinterpret the question's requirement, but based on the calculation intended for annualization, none of the provided choices accurately reflect the correct annualization process described. Given the context, the closest correct interpretation of the question's intent would be to select the option that might represent a misunderstanding of the provided options and calculations.

Omnidata Uses the Annualized Income Method to Determine Its Quarterly