Before considering a net operating loss carryforward of $40 million, Fowler Corp

Question

Before considering a net operating loss carryforward of $40 million, Fowler Corporation reported $100 million of pretax accounting and taxable income in the current year.  The income tax rate for all previous years was 40%. On January 1 of the current year a new tax law was enacted, reducing the rate to 30% effective immediately. Fowler's income tax payable for the current year would be:

Answer

$24 million.

$14 million.

$30 million.

$18 million.

$24 million.

$14 million.

$30 million.

$18 million.

Explanation / Answer

$24 million.

$24 million.

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