Over the last five years, corporation a has been consistently profitable. its earnings before taxe were as follows earnings:
1 - $1,000
2 - $3,000
3 - $4300
4 - $5200
5 - $4400
a. If the corporate tax rate was 25 percent, what were the firms income taxes for each year?
b. Unfortunatly, in year 6 the firm experienced a major decline in sales, which resulted in a loss of $10,800. What impact will the loss have on the firms taxes for each year if the permitted carryback is two years?