Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences reported first on: Income Statement Tax Return Revenue Expense Revenue Expense (1) $ 17,500 (2) $ 17,500 (3) $ 17,500 $ 14,500 (4) $ 14,500 $ 17,500 $ 6,500 $ 11,500 Required: For each situation, determine the taxable income assuming pretax accounting income is $100,000. Note: Amounts to be deducted should be indicated by a minus sign. Accounting income Temporary differences: Income statement first: Revenue Expense Tax return first: Revenue (1) (2) (3) (4) $ 100,000 $ 100,000 $ 100,000 $ 100,000 (17,500) (14,500) 17,500 17,500 14,500 6,500 Expense (17,500) (11,500) Taxable income $ 82,500 $ 82,500 $ 132,000 $ 98,000
Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences reported first on: Income Statement Tax Return Revenue Expense Revenue Expense (1) $ 17,500 (2) $ 17,500 (3) $ 17,500 $ 14,500 (4) $ 14,500 $ 17,500 $ 6,500 $ 11,500 Required: For each situation, determine the taxable income assuming pretax accounting income is $100,000. Note: Amounts to be deducted should be indicated by a minus sign. Accounting income Temporary differences: Income statement first: Revenue Expense Tax return first: Revenue (1) (2) (3) (4) $ 100,000 $ 100,000 $ 100,000 $ 100,000 (17,500) (14,500) 17,500 17,500 14,500 6,500 Expense (17,500) (11,500) Taxable income $ 82,500 $ 82,500 $ 132,000 $ 98,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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