What amount that reports as net loss for financial reporting

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Katchup, Inc., reported a taxable and accounting loss of $ 130,000 for 2020. Its pre-tax accounting income and taxable income for the previous two years were as follows:

2018 $ 60,000

2019 $ 80,000

Problem 1: Assume Katchup uses the carryback provisions. The tax rates for the three years were 25% for 2018, 35% for 2019 and 30% for 2020. The amount that it reports as a net loss for financial reporting purposes in 2020, would be

a. $0.

b. $90,500.

c. $91,000.

d. $130,000.

e. none of the above.

Reference no: EM132973207

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