A company had taxable income of $2 million in fiscal 2013 and paid taxes of 0.6 million; the company incurred a loss of $7 million in fiscal 2015 when the tax rate is 50%.How much refund is the company entitled to?

Question

Quizplus · Accepted Answer

The company paid taxes of $0.6 million in fiscal 2013 on its taxable income. In fiscal 2015, it incurred a loss of $7 million. If the tax rate is 50%, the loss can be carried back to offset the taxable income of previous years, allowing the company to claim a refund on taxes previously paid. Since the tax paid was $0.6 million, that is the maximum refund the company can claim.

A Company Had Taxable Income of $2 Million in Fiscal