Tarleton Corporation has net income per books of $267,400. A perusal of its financial records indicate the
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Question:
1) Fines paid for violation of environmental regulations: $20,000
2) The corporation had capital gains of $10,000 and capital losses of $20,000 (NOTE: THERE IS NO SUCH THING AS CAPITAL GAINS OR LOSSES FOR FINANCIAL STATEMENT PURPOSES; ALL GAINS AND LOSSES ARE TREATED THE SAME. THE CAPITAL vs. ORDINARY DISTINCTION OF GAINS AND LOSSES IS STRICTLY A TAX CONCEPT WITH RELATED RULES. RECALL FROM THE NOTES THAT A CORPORATION IS NOT ENTITLED TO DEDUCT NET CAPITAL LOSSES FOR TAX PURPOSES AND MUST CARRY THOSE TO A DIFFERENT YEAR WHERE ADDITIONAL CAPITAL GAIN INCOME EXISTS TO TAKE THE DEDUCTION).
3) The corporation had depreciation expense for financial statement purposes of $50,000 but $75,000 for tax purposes.
4) The corporation sold land for a gain of $25,000. For financial statement purposes, this gain was recognized in the year of sale, but, for tax purposes, the corporation recognized only $10,000 of gain in the current year because of using the installment method.
5) The corporation paid $132,600 of income taxes
6) The company had no special deductions (i.e., dividend exclusion) or net operating losses deducted below Line 28 of its Form 1120.
What was the company's taxable income?
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Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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