Jenkin Corporation reported the following for its first two taxable years. Calculate Jenkin's U.S. tax liability for Year 2.

Question

Jenkin Corporation reported the following for its first two taxable years.  Calculate Jenkin's U.S. tax liability for Year 2.

Quizplus · Accepted Answer

To calculate Jenkin Corporation's U.S. tax liability for Year 2, we need to determine their taxable income for the year.

Starting with their taxable income from Year 1 of $750,000, we subtract their current year's net operating loss (NOL) of $150,000, which gives us a taxable income of $600,000.

This income is taxed at a rate of 34%, which gives us a tax liability of $204,000.

Therefore, the correct choice is C.

Jenkin Corporation Reported the Following for Its First Two Taxable