In its first year of operations Best Corp. had income before tax of $500,000. Best made income tax payments totaling $210,000 during the year and has an income tax rate of 40%. What is Best's net income for the year?

a. $299,000.

b. $161,000.

c. $292,000.

d. $302,000.

The correct answer is $300,000.

Explanation:

According to the scenario, the given data are as follows:

Income before tax = $500,000

Tax rate = 40%

Tax amount = $500,000 * 40% = $200,000

So, we can calculate the Best's net income by using following formula:

Net Income = Income Before Tax - Tax amount

= $500,000 - $200,000

= $300,000

The Best's net income is $300,000.