Operating loss carryforward problem


In 2008, Eric Corporation reported $90,000 net income before taxes. The income tax rate for 2008 was 30 percent. Eric had unused $60,000 new operating loss carryforward arising in 2007 when the tax rate was 35 percent. The income tax expense Eric would report for 2008 would be:

a. $27,000

b.$6,000

c. $9,000

d.$10,500

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Accounting Basics: Operating loss carryforward problem
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