Calculate book tax difference for the following accounts

Huskies receipts for book purposes are as follows:

Gross receipts for 2022 totaled $1,850,000

Returns and allowances totaled $255,000

Huskies has the following interest income:

City of DeKalb bonds $1,250

BMO Harris Bank certificate of deposits $2,200

Huskies received dividend income:

Disney Corporation $4,400

(Huskies owns less than 5% of Disney stock)

In December 2022, Huskies received prepaid rent $25,000

(Received from a lessee who will lease space in one

of Huskies stores from 1/1/2023 through 10/31/2023)

Huskies expenses for book purposes are as follows:

Cost of Goods Sold $510,000

Salaries paid (including officer’s compensation of $100,000) $240,000

Federal income tax paid $75,000

Depreciation reported on financial statements $79,000

State & local taxes paid $58,300

Interest expense $4,200

Repairs $12,000

Rent paid $48,000

Advertising $18,000

Contribution to Governor’s re-election campaign $25,000

Property/Casualty Insurance Premiums $32,000

Business meals (served at a restaurant) $4,500

Business entertainment $6,600

Hotel and airfare 100% for business $3,500

Premiums paid for key employee life insurance $9,800

Charitable contributions paid $65,000

Other items:

Huskies total depreciation for tax purposes $119,000

Huskies has a net capital loss carryforward from 2021 of $8,000

Huskies sold IBM stock on 7/29/2022 for $4,100. The shares had been purchased on 12/28/2018 for $1,500.

In 2021, Huskies had a net operating loss of $33,000.

Huskies made the following estimated income tax payments to the IRS for 2022:

Overpayment in 2021, credited to 2022 $20,000

2^nd qtr., 3^rd qtr., and 4^th qtr. $30,000 each

Huskies Inc. does not qualify for any other credits

Any overpayment of 2022 tax should be credited to its 2023 estimated taxes.

Answer rating: 100% (QA)

1 Book tax difference for gross receipts 1850000 2 Book tax difference for returns and allowances 25... View the full answer