The Chance Company Began Operations in 2014 And, for That

Multiple Choice

The Chance Company began operations in 2014 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, 2014. During 2015, Chance reported pretax accounting income of $375,000. Assuming an income tax rate of 35%, what should Chance record in 2015 as income tax payable at the end of 2015?

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