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For Year Ended December 31, 2023 Gross Sales Cost of sales Gross Profit Salaries & Wages Repairs & Maintenance Bad Debt expense Rent Expense GAAP/Book Book-Tax adj. Form 1120 Tax Return 45,000,000 (27,450,000) 17,550,000 (3,890,000) (765,000) (380,000) (1,350,000) 45,000,000 (27,450,000) 17,550,000 (3,890,000) (765,000) (380,000) (1,350,000) (252,850) (1,585,000) Payroll Tax Expense (252,850) Federal Income Tax Expense (1,585,000) Interest expense (48,000) (48,000) Charitable Contributions (1,550,000) (1,550,000) Depreciation expense Advertising expense Pension Expense Meals expense (2,000,000) (67,000) (310,000) (2,000,000) (67,000) (310,000) (35,000) (35,000) Total Expenses (12,232,850) (12,232,850) Long-term Capital Gain 389,000 389,000 Short-term Capital Loss (524,600) (524,600) Total Other Income/(Loss) (135,600) (135,600) Taxable Income/(Loss) 5,181,550 5,181,550 NOTES related to the book-tax differences: 1.) MACRS depreciation for 2023 is $1,655,000 2.) 3.) The allowance method of bad debts resulted in an expense of $380,000 but the direct write-off method results in bad debt expense of $415,000 Charitable contributions represents amounts paid to the U.S. President's re-election campaign. 4.) The salaries & wages amount includes $78,000 of accrued bonuses that have not been paid out by year end. 5.) The Payroll tax expense line item includes $5,400 of a penalty paid to the State of Illinois Department of Revenue for late payroll tax filings. 6.) The capital gain relates to the sale of Tesla stock, and the capital loss relates to the sale of Facebook stock. 7.) Any federal income tax expenses are non-deductible for tax return purposes.

For Year Ended December 31, 2023 Gross Sales Cost of sales Gross Profit Salaries & Wages Repairs & Maintenance Bad Debt expense Rent Expense GAAP/Book Book-Tax adj. Form 1120 Tax Return 45,000,000 (27,450,000) 17,550,000 (3,890,000) (765,000) (380,000) (1,350,000) 45,000,000 (27,450,000) 17,550,000 (3,890,000) (765,000) (380,000) (1,350,000) (252,850) (1,585,000) Payroll Tax Expense (252,850) Federal Income Tax Expense (1,585,000) Interest expense (48,000) (48,000) Charitable Contributions (1,550,000) (1,550,000) Depreciation expense Advertising expense Pension Expense Meals expense (2,000,000) (67,000) (310,000) (2,000,000) (67,000) (310,000) (35,000) (35,000) Total Expenses (12,232,850) (12,232,850) Long-term Capital Gain 389,000 389,000 Short-term Capital Loss (524,600) (524,600) Total Other Income/(Loss) (135,600) (135,600) Taxable Income/(Loss) 5,181,550 5,181,550 NOTES related to the book-tax differences: 1.) MACRS depreciation for 2023 is $1,655,000 2.) 3.) The allowance method of bad debts resulted in an expense of $380,000 but the direct write-off method results in bad debt expense of $415,000 Charitable contributions represents amounts paid to the U.S. President's re-election campaign. 4.) The salaries & wages amount includes $78,000 of accrued bonuses that have not been paid out by year end. 5.) The Payroll tax expense line item includes $5,400 of a penalty paid to the State of Illinois Department of Revenue for late payroll tax filings. 6.) The capital gain relates to the sale of Tesla stock, and the capital loss relates to the sale of Facebook stock. 7.) Any federal income tax expenses are non-deductible for tax return purposes.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 32BEB
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For Year Ended December 31, 2023 Gross Sales Cost of sales Gross Profit Salaries & Wages Repairs & Maintenance Bad Debt expense Rent Expense GAAP/Book Book-Tax adj. Form 1120 Tax Return 45,000,000 (27,450,000) 17,550,000 (3,890,000) (765,000) (380,000) (1,350,000) 45,000,000 (27,450,000) 17,550,000 (3,890,000) (765,000) (380,000) (1,350,000) (252,850) (1,585,000) Payroll Tax Expense (252,850) Federal Income Tax Expense (1,585,000) Interest expense (48,000) (48,000) Charitable Contributions (1,550,000) (1,550,000) Depreciation expense Advertising expense Pension Expense Meals expense (2,000,000) (67,000) (310,000) (2,000,000) (67,000) (310,000) (35,000) (35,000) Total Expenses (12,232,850) (12,232,850) Long-term Capital Gain 389,000 389,000 Short-term Capital Loss (524,600) (524,600) Total Other Income/(Loss) (135,600) (135,600) Taxable Income/(Loss) 5,181,550 5,181,550 NOTES related to the book-tax differences: 1.) MACRS depreciation for 2023 is $1,655,000 2.) 3.) The allowance method of bad debts resulted in an expense of $380,000 but the direct write-off method results in bad debt expense of $415,000 Charitable contributions represents amounts paid to the U.S. President's re-election campaign. 4.) The salaries & wages amount includes $78,000 of accrued bonuses that have not been paid out by year end. 5.) The Payroll tax expense line item includes $5,400 of a penalty paid to the State of Illinois Department of Revenue for late payroll tax filings. 6.) The capital gain relates to the sale of Tesla stock, and the capital loss relates to the sale of Facebook stock. 7.) Any federal income tax expenses are non-deductible for tax return purposes.
Transcribed Image Text:For Year Ended December 31, 2023 Gross Sales Cost of sales Gross Profit Salaries & Wages Repairs & Maintenance Bad Debt expense Rent Expense GAAP/Book Book-Tax adj. Form 1120 Tax Return 45,000,000 (27,450,000) 17,550,000 (3,890,000) (765,000) (380,000) (1,350,000) 45,000,000 (27,450,000) 17,550,000 (3,890,000) (765,000) (380,000) (1,350,000) (252,850) (1,585,000) Payroll Tax Expense (252,850) Federal Income Tax Expense (1,585,000) Interest expense (48,000) (48,000) Charitable Contributions (1,550,000) (1,550,000) Depreciation expense Advertising expense Pension Expense Meals expense (2,000,000) (67,000) (310,000) (2,000,000) (67,000) (310,000) (35,000) (35,000) Total Expenses (12,232,850) (12,232,850) Long-term Capital Gain 389,000 389,000 Short-term Capital Loss (524,600) (524,600) Total Other Income/(Loss) (135,600) (135,600) Taxable Income/(Loss) 5,181,550 5,181,550 NOTES related to the book-tax differences: 1.) MACRS depreciation for 2023 is $1,655,000 2.) 3.) The allowance method of bad debts resulted in an expense of $380,000 but the direct write-off method results in bad debt expense of $415,000 Charitable contributions represents amounts paid to the U.S. President's re-election campaign. 4.) The salaries & wages amount includes $78,000 of accrued bonuses that have not been paid out by year end. 5.) The Payroll tax expense line item includes $5,400 of a penalty paid to the State of Illinois Department of Revenue for late payroll tax filings. 6.) The capital gain relates to the sale of Tesla stock, and the capital loss relates to the sale of Facebook stock. 7.) Any federal income tax expenses are non-deductible for tax return purposes.
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