In the current year, Apricot Corporation had taxable income of $120,000. Included in taxable income was a $10,000 capital gain. The $120,000 of taxable income does not include a $15,000 capital loss carryforward available from the previous year. What is Apricot Corporation's current year income tax liability before any tax credits?

Answer is $23,100.

Refer below.

Explanation:

In the current year, Apricot Corporation had taxable income of $120,000. Included in taxable income was a $10,000 capital gain. The $120,000 of taxable income does not include a $15,000 capital loss carryforward available from the previous year. The Apricot Corporation's current year income tax liability before any tax credits is:

$23,100

$23,100 total tax liability

Explanation:

total taxable income           $120,000

- loss carryforward               ($10,000)        

net taxable income for the year $110,000

the capital loss carryforward can offset the $10,000 capital gain only, and a $5,000 loss carryforward will remain for next year.

Since the company total taxable income is $110,000 we must multiply it by the corporate income tax rate 21% = $110,000 x 21% = $23,100 total tax liability

the answer should be a)