Question

Omnidata uses the annualized income method to determine its quarterly federal income tax payments. It had $100,000, $50,000, and $90,000 of taxable income for the first, second, and third quarters, respectively ($240,000 in total through the first three quarters). What is Omnidata's annual estimated taxable income as of the end of the third quarter?

A. $300,000.
B. $320,000.
C. $400,000.
D. $480,000.

Answer 1

To calculate Omnidata's annual estimated taxable income as of the end of the third quarter, we need to consider the taxable income for the first three quarters and then annualize it.

Step-by-step explanation:

To calculate Omnidata's annual estimated taxable income as of the end of the third quarter, we need to consider the taxable income for the first three quarters and then annualize it. The total taxable income for the first three quarters is $240,000. To annualize it, we multiply by four quarters. So, the annual estimated taxable income as of the end of the third quarter is $240,000 * 4 = $960,000. Therefore, the correct answer is option D. $480,000.