Income before taxes = $900,000 Income before taxes included the following: Interest income of...
Question:
Income before taxes = $900,000
Income before taxes included the following:
Interest income of $80,000 (from municipal bonds)
Rental income was collected in advance in 2013 and earned in 2014 = $20,000
Depreciation per books = $40,000 and per income taxes = $100,000
Warranty expense in 2014 was $20,000 but for tax purpose only $5,000 was deductible
Assume that at the beginning of 2014, the deferred tax asset balance = $13,000 due to the rent income. Tax rate for 2014 and the foreseeable future is 40%.
a) Calculate taxable income.
b) Make the necessary tax entry, make sure to include the amount for tax expense and deferred taxes.
Income Tax:
That's the percentage of our revenues that the government collects to support its services and programs, and it's automatically deducted from our payroll by our employer.
Answer and Explanation: 1
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View this answera. Calculate taxable income
Income before taxes = $ 900,000
Less: Interest income from municipal bonds = 80,000
Less: Rental income was collected...
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Income Tax: Tax Liability & Deductions
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Chapter 3 / Lesson 5
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Learn what income tax liability is. Find out what taxable and adjusted gross income are, discover how to calculate tax liability, and examine common deductions.
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