In its first four years of operations Peridot Jewelers reported the following operating income (loss) amounts: There were no other deferred income taxes in any year. In 2017, Peridot elected to carry back its operating loss. The enacted income tax rate was 40%. In its 2018 income statement, what amount should Peridot report as current income tax payable?

Question

In its first four years of operations Peridot Jewelers reported the following operating income (loss) amounts:  There were no other deferred income taxes in any year. In 2017, Peridot elected to carry back its operating loss. The enacted income tax rate was 40%. In its 2018 income statement, what amount should Peridot report as current income tax payable?

Quizplus · Accepted Answer

[$450,000 - ($425,000 - 150,000 - 100,000)] × 40% = $110,000

In Its First Four Years of Operations Peridot Jewelers Reported