Question

The accounting (not the income tax) records of Neighbors Publications, Inc., provide the income statement for 2014.
2014
Total revenue ........................................$790,000
Expenses:
Cost of goods sold............................... $410,000
Operating expenses ............................ 175,000
Total expenses before tax.................... 585,000
Pretax accounting income ....................$205,000
Taxable income for 2014 includes these modifications from pre-tax accounting income:
a. Additional taxable income of $14,000 earned in 2015 but taxed in 2014.
b. Additional depreciation expense of $21,000 for MACRS tax depreciation in 2014.
The income tax rate is 32%.

Requirements
1. Compute Neighbor’s taxable income for 2014.
2. Journalize the corporation’s income taxes for 2014.
3. Prepare the corporation’s single-step income statement for 2014.



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  • CreatedJuly 25, 2014
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