During the year 2018,Torino Corporation suffered a $1,200,000 loss when its factory was severely damaged in an earthquake.Assuming the corporate income tax rate is 30%,what amount will Torino report as anon-recurring loss on its income statement for 2018? Assume earthquakes are not common in this area.

Question

Quizplus · Accepted Answer

The non-recurring loss will be the portion of the loss that is not expected to occur regularly in the normal course of the company's operations. Since earthquakes are not common in the area, the loss is not expected to be a regular occurrence. Therefore, the non-recurring loss will be calculated by multiplying the loss amount by the tax rate: $1,200,000 x 30% = $360,000. Therefore, the correct answer is B.

During the Year 2018,Torino Corporation Suffered a $1,200,000 Loss When