Bennington Corporation began operations in 2004. There have been no permanent or temporary differences to account for since the inception of the business. The following data are available:
In 2008, Bennington had an operating loss of $930,000. What amount of income tax benefits should be reported on the 2008 income statement due to this loss?

Question

Bennington Corporation began operations in 2004. There have been no permanent or temporary differences to account for since the inception of the business. The following data are available:
 In 2008, Bennington had an operating loss of $930,000. What amount of income tax benefits should be reported on the 2008 income statement due to this loss?

Quizplus · Accepted Answer

($750,000 × .45) + [($930,000 - $750,000) × .40] = $409,500.

Bennington Corporation Began Operations in 2004