Central City, Inc. has incurred a $50,000 loss on property due to an earthquake. Earthquakes have...

Central City, Inc. has incurred a $50,000 loss on property due to an earthquake. Earthquakes have occurred in this region. What amount will be reported for this loss on company's income statement, assuming a 30% tax rate?

A) $50,000

B) $35,000

C) $15,000

D) Zero, due to the fact that this event is infrequent in nature.

Expert Solution

Extra ordinary loss due to an earth quake = $ 50,000

Less: Tax saving @ 30% = $ 15,000

Loss reported in income statement = $ 35000

Answer (b)

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ekkarill92 answered 3 months ago

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