TLR Productions reported income before taxes of $175,000 for the years 2013, 2014, and 2015. In 2016 they experienced a loss of $300,000. TLR had a tax rate of 25% in 2013 and 2014, and a rate of 35% is 2015 and 2016. Assuming the company uses the carryback provisions for the net operating loss, what amount should be reported as Income Tax Refund Receivable in 2016?
A) $43,750
B) $75,000
C) $87,500
D) $105,000
Answer: C
Explanation: C) (175,000 × 25%) + (125,000 × 35%) = $87,500
Business
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