efore considering a tax loss carryforward of $80 million, Aero Corporation reported $200 million of pretax accounting and taxable income in the current year. The income tax rate for all previous years was 40%. On January 1 of the current year a new tax law was enacted, reducing the rate to 35% effective immediately. Aero's income tax payable for the current year would be:     Select one: a. $48 million. b. $28 million. c. $36 million. d. $42 million. e. $80 million.

SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter13: Corporations: Earning & Profits And Distributions
Section: Chapter Questions
Problem 20P
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 Before considering a tax loss carryforward of $80 million, Aero Corporation reported $200 million of pretax accounting and taxable income in the current year. The income tax rate for all previous years was 40%. On January 1 of the current year a new tax law was enacted, reducing the rate to 35% effective immediately. Aero's income tax payable for the current year would be:

 

 

Select one:
a.
$48 million.
b.
$28 million.
c.
$36 million.
d.
$42 million.
e.
$80 million.
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