A company’s provision for income taxes resulted in effective tax rates attributable to loss from continuing operations before cumulative effect 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 (benefit) From confirming 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 benefit |
132,000 |
22,000 |
100,000 |
|
Change in valuation allowance for deemed tax assets |
(150,000) |
(766,000) |
(754,000) |
|
Income tax expense |
$227,000 |
$56,000 |
$82,000 |
In 2007, the company’s net income (loss) was closest to
a. ($217,000).
b. ($329,000).
c. ($556,000).