The taxpayer is an accrual method taxpayer. The federal tax rate is 21%. Taxpayer operates in one
Question:
The taxpayer is an accrual method taxpayer.
The federal tax rate is 21%.
Taxpayer operates in one state, State A, which has a tax rate of 4%.
State A apportionment rate is 100%.
Taxpayer's operations generate a $100,000 FDII deduction.
Meals & Entertainment were subject to 50% disallowance.
Penalties were paid to the local government.
Federal depreciation is $400,000.
State A depreciation is $100,000.
Prepaid insurance is for a contract benefit period of 12 months, beginning January 1 of Year 2. Payment was made on December 1 of Year 1.
Accrued Vacation paid out by March 15 of Year 2 is $2,000.
Accrued Bonus paid out by March 15 of Year 2 is $10,000. However, the company deducts the Accrued Bonus as accrued.
The company does not addback life insurance premiums on their tax return or tax provision.
Prepare the income tax provision.
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson