Two companies have the following values on their annual tax returns. Solve for the Taxable Income of the 2 companies. Company 1(P)Company 2(P)1,820,000720,00025,000-591,00018,000Sales revenueInterest revenueExpensesDepreciation31 ,000-754,00048,000

Solution Concept Taxable income means the income that is chargeable to income tax Taxable income…

Answered: Company 1 (P) 720,000 25,000 -591,000…

Company 1 (P) 720,000 25,000 -591,000 18,000 Company 2 (P) 1,820,000 Sales revenue Interest revenue Expenses Depreciation 31 ,000 -754,000 48,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

Two companies have the following values on their annual tax returns. Solve for the Taxable Income of the 2 companies.

Company 1
(P)
Company 2
(P)
1,820,000
720,000
25,000
-591,000
18,000
Sales revenue
Interest revenue
Expenses
Depreciation
31 ,000
-754,000
48,000

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