A company’s provision for income taxes resulted in eff ective tax rates attributable to loss fromcontinuing operations before cumulative eff ect of change in accounting principles that variedfrom the statutory federal income tax rate of 34 percent, as summarized in the table below.Year Ended 30 June 2007 2006 2005Expected federal income tax expense (benefi t) fromcontinuing operations at 34 percent ($112,000) $768,000 $685,000Expenses not deductible for income tax purposes 357,000 32,000 51,000State income taxes, net of federal benefi t 132,000 22,000 100,000Change in valuation allowance for deferred tax assets (150,000) (766,000) (754,000)Income tax expense $227,000 $56,000 $82,00020 . In 2007, the company’s net income (loss) was closest to:A . ($217,000).B . ($329,000).C . ($556,000).
A company’s provision for income taxes resulted in eff ective tax rates attributable to loss from
continuing operations before cumulative eff ect of change in accounting principles that varied
from the statutory federal income tax rate of 34 percent, as summarized in the table below.
Year Ended 30 June 2007 2006 2005
Expected federal income tax expense (benefi t) from
continuing operations at 34 percent ($112,000) $768,000 $685,000
Expenses not deductible for income tax purposes 357,000 32,000 51,000
State income taxes, net of federal benefi t 132,000 22,000 100,000
Change in valuation allowance for
Income tax expense $227,000 $56,000 $82,000
20 . In 2007, the company’s net income (loss) was closest to:
A . ($217,000).
B . ($329,000).
C . ($556,000).
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