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17 February, 20:48

In its first year of operations Best Corp. had income before tax of $500,000. Best made income tax payments totaling $210,000 during the year and has an income tax rate of 40%. What is Best's net income for the year?

a. $299,000.

b. $161,000.

c. $292,000.

d. $302,000.

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  1. 18 February, 00:44
    0
    The correct answer is $300,000.

    Explanation:

    According to the scenario, the given data are as follows:

    Income before tax = $500,000

    Tax rate = 40%

    Tax amount = $500,000 * 40% = $200,000

    So, we can calculate the Best's net income by using following formula:

    Net Income = Income Before Tax - Tax amount

    = $500,000 - $200,000

    = $300,000

    The Best's net income is $300,000.
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