In 2015,T Corporation changed its tax year from ending each April 30th to ending each December 31st.The corporation earned $60,000 during the period May 1,2015 through December 31,2015.The annualized income for the short year is $90,000.

Question

Quizplus · Accepted Answer

To annualize the income for the short year, we need to multiply the actual income ($60,000) by 12/8, since the short year is 8 months instead of 12 months.

$60,000 * 12/8 = $90,000

Therefore, the annualized income for the short year is $90,000, making option A true.

In 2015,T Corporation Changed Its Tax Year from Ending Each