The Bulldog Corporation had income of $15,000, $25,000, and $30,000 in 2003, 200

Question

The Bulldog Corporation had income of $15,000, $25,000, and $30,000 in 2003, 2004, and 2005, respectively. The firm pays taxes at a rate of 15%. In 2006, Bulldog sustained a loss of $20,000. What amount of refund is due the firm? (Assume that the firm can carry back losses 3 years).

I tried calculating this fashion but not sure if I did this right.

Year

Taxable Income

Taxes Paid

2003

             15,000.00

15%

    2,250.00

2004

             25,000.00

15%

    3,750.00

2005

             30,000.00

15%

    4,500.00

2006

           (20,000.00)

10,500.00

Year

Taxable Income

Taxes Paid

2003

             15,000.00

15%

    2,250.00

2004

             25,000.00

15%

    3,750.00

2005

             30,000.00

15%

    4,500.00

2006

           (20,000.00)

10,500.00

Explanation / Answer

amount of refund is due the firm: $25,000

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