Franton Company, a calendar year, accrual basis corporation, reported $2,076,000 net income after tax on its current year financial statements prepared in accordance with GAAP. The corporation's financial records reveal the following information. Federal tax expense per books was $660,000. Franton received $22,400 of dividends from its < 1% investment in Microsoft and General Motors stock. Bad debt expense was $12,900, and write-offs of uncollectible accounts receivable totaled $16,300. Book depreciation was $110,890, and MACRS depreciation was $94,700. Franton paid a $50,000 fine to the City of Albany for illegal trash dumping. Compute Franton's regular tax liability.
Franton Company, a calendar year, accrual basis corporation, reported $2,076,000 net income after tax on its current year financial statements prepared in accordance with GAAP. The corporation's financial records reveal the following information. Federal tax expense per books was $660,000. Franton received $22,400 of dividends from its < 1% investment in Microsoft and General Motors stock. Bad debt expense was $12,900, and write-offs of uncollectible accounts receivable totaled $16,300. Book depreciation was $110,890, and MACRS depreciation was $94,700. Franton paid a $50,000 fine to the City of Albany for illegal trash dumping. Compute Franton's regular tax liability.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
.
Franton Company, a calendar year, accrual basis corporation, reported $2,076,000 net income after tax on its current year financial statements prepared in accordance with GAAP. The corporation's financial records reveal the following information.
- Federal tax expense per books was $660,000.
- Franton received $22,400 of dividends from its < 1% investment in Microsoft and General Motors stock.
Bad debt expense was $12,900, and write-offs of uncollectibleaccounts receivable totaled $16,300.- Book
depreciation was $110,890, and MACRS depreciation was $94,700. - Franton paid a $50,000 fine to the City of Albany for illegal trash dumping.
Compute Franton's regular tax liability.
Hint: The correct answer should be $585,394
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