Franklin Fisheries had extraordinary losses of $150,000.If their corporate tax rate is 30%,at what amount will the losses be shown on the Income Statement?

Question

Quizplus · Accepted Answer

The losses will be offset against the taxable income and reduce the tax liability. The amount of tax saving will be 30% of the losses, which is $45,000. Therefore, the losses will be shown on the income statement as $105,000 ($150,000 - $45,000).

Franklin Fisheries Had Extraordinary Losses of $150,000