(25) In 2021, ABC Company had pretax income of $20,000. ABC depreciated an additional $4,000 on its tax report because ABC Company used accelerated depreciation on its tax report and straight-line on its accounting records. The excess depreciation will reverse evenly over the next two years. Also included in pretax income was a $1,000 fine for polluting its waterways located near its chemical plant. The enacted tax rates are: 2021 20%, 2022 30%, and 2023 35%. Calculate taxable income for ABC Company in 2021. (26) Use the information provided in question 25. What will be the dollar difference between the company’s tax expense and tax payable in 2022?
(25) In 2021, ABC Company had pretax income of $20,000. ABC depreciated an additional $4,000 on its tax report because ABC Company used accelerated depreciation on its tax report and straight-line on its accounting records. The excess depreciation will reverse evenly over the next two years. Also included in pretax income was a $1,000 fine for polluting its waterways located near its chemical plant. The enacted tax rates are: 2021 20%, 2022 30%, and 2023 35%. Calculate taxable income for ABC Company in 2021. (26) Use the information provided in question 25. What will be the dollar difference between the company’s tax expense and tax payable in 2022?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(25) In 2021, ABC Company had pretax income of $20,000. ABC
(26) Use the information provided in question 25. What will be the dollar difference between the company’s tax expense and tax payable in 2022?
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