Follett Company Incurred a First Quarter Operating Loss Before Income

Multiple Choice

Follett Company incurred a first quarter operating loss before income tax effect of $2,000,000.This is a normal occurrence for Follett because of seasonal fluctuations.Experience has demonstrated the income earned during the remaining quarters far exceeds the first quarter losses each year.Follett estimates its annual income tax rate will be 35 percent.What net loss should Follett report for the first quarter?

A) $0
B) $700,000
C) $1,300,000
D) $2,000,000