Question: The accounting not the income tax records of Neighbors Publications

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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