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Studios Reported a Net Capital Loss of $39,000 in Year

Question 33

Multiple Choice

Studios reported a net capital loss of $39,000 in Year 5. It reported net capital gains of $32,000 in Year 4 and $45,000 in Year 6. What is the amount and nature of the book-tax difference in Year 6 related to the net capital carryover?


A) $38,000 unfavorable.
B) $38,000 favorable.
C) $7,000 unfavorable.
D) $7,000 favorable.

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