Eckert uses the straight-line method of depreciation for financial reporting purposes and accelerated depreciation for tax purposes. The amount charged to depreciation expense on its books this year was $1,800,000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 30% tax rate, what amount was deducted for depreciation on the corporation's tax return for the current year? Eckert Corporation's partial income statement after its first year of operations is as follows: Income before income taxes $ 37,50,000 Income tax expense: Current Deferred Net income $ 10,35,000 90,000 $ 11,25,000 $ 26,25,000
Eckert uses the straight-line method of depreciation for financial reporting purposes and accelerated depreciation for tax purposes. The amount charged to depreciation expense on its books this year was $1,800,000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 30% tax rate, what amount was deducted for depreciation on the corporation's tax return for the current year? Eckert Corporation's partial income statement after its first year of operations is as follows: Income before income taxes $ 37,50,000 Income tax expense: Current Deferred Net income $ 10,35,000 90,000 $ 11,25,000 $ 26,25,000
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 24CE
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Transcribed Image Text:Eckert uses the straight-line method of depreciation for financial reporting purposes and
accelerated depreciation for tax purposes. The amount charged to depreciation expense on its
books this year was $1,800,000. No other differences existed between book income and
taxable income except for the amount of depreciation. Assuming a 30% tax rate, what amount
was deducted for depreciation on the corporation's tax return for the current year?
Eckert Corporation's partial income statement after its first year of
operations is as follows:
Income before income taxes
$ 37,50,000
Income tax expense:
Current
Deferred
Net income
$ 10,35,000
90,000
$ 11,25,000
$ 26,25,000
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