Morrow Spice Company has experienced a 60000 loss due to tor

Morrow Spice Company
has experienced a $60,000 loss due to tornado damage to their inventory.
Tornados have never before occurred in this area. Assuming that the company’s
tax rate is 30%, what amount will be reported for this loss on the income
statement?

Question 4 options:

$60,000

$42,000

$18,000

$36,000

Solution

B. $42,000

Amount reported for this loss on the income statement will be:

= $60,000 * 70%

= $42,000