The Chance Company Began Operations in 2016 And, for That

Multiple Choice

The Chance Company began operations in 2016 and, for that calendar year, reported an operating loss of $200,000. Due to sufficient verifiable positive evidence, no valuation allowance was established to reduce the deferred tax asset as of December 31, 2016. During 2017, Chance reported pretax accounting income of $375,000. Assuming an income tax rate of 35%, what should Chance record in 2017 as income tax payable at the end of 2017?

A) $0
B) $70,000
C) $61,250
D) $131,250