Caramel Compnay's 2023 Income Statement shpwed pretax accounting income of $2,500,000. To compute the federal income tax liability, the following 2023 data are provided: Income from exempt municipal bonds- $100,000 Depreciation deducted for tax purposes in excess of depreciation deducted for financial statement purposes- 200,000 Income tax rate- 20% What amount of current federal income tax liability should be included in caramel Company's December 31. 2023 balance sheet?
Caramel Compnay's 2023 Income Statement shpwed pretax accounting income of $2,500,000. To compute the federal income tax liability, the following 2023 data are provided:
Income from exempt municipal bonds- $100,000
Income tax rate- 20%
What amount of current federal income tax liability should be included in caramel Company's December 31. 2023
The corporation has to pay income taxes. Income tax is paid on the taxable income using the applicable tax rate. Some income is exempt from tax and therefore does not form part of the taxable income. The exemptions and deductions reduce the taxable income and direct tax liability.
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