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Kelly Company has pretax accounting income of $100,000 for 2024. The following items were considered differences between pretax accounting and taxable income: 1. Interest on municipal bonds $9,000 2. Excess tax depreciation $4,000 3. Life insurance premiums on officers $5,000 4. Warranty expense $10,000; $8,000 in warranties actually paid. The company is subject to a 30% tax rate. What is Kelly Company's effective tax rate in 2024? O A. 26.7% OB. 31.5% OC. 28.8% O D. 30.0%

Kelly Company has pretax accounting income of $100,000 for 2024. The following items were considered differences between pretax accounting and taxable income: 1. Interest on municipal bonds $9,000 2. Excess tax depreciation $4,000 3. Life insurance premiums on officers $5,000 4. Warranty expense $10,000; $8,000 in warranties actually paid. The company is subject to a 30% tax rate. What is Kelly Company's effective tax rate in 2024? O A. 26.7% OB. 31.5% OC. 28.8% O D. 30.0%

FINANCIAL ACCOUNTING
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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Kelly Company has pretax accounting income of $100,000 for 2024. The following items were considered differences between pretax accounting and taxable income: 1. Interest on municipal bonds $9,000 2. Excess tax depreciation $4,000 3. Life insurance premiums on officers $5,000 4. Warranty expense $10,000; $8,000 in warranties actually paid. The company is subject to a 30% tax rate. What is Kelly Company's effective tax rate in 2024? O A. 26.7% OB. 31.5% OC. 28.8% O D. 30.0%
Transcribed Image Text:Kelly Company has pretax accounting income of $100,000 for 2024. The following items were considered differences between pretax accounting and taxable income: 1. Interest on municipal bonds $9,000 2. Excess tax depreciation $4,000 3. Life insurance premiums on officers $5,000 4. Warranty expense $10,000; $8,000 in warranties actually paid. The company is subject to a 30% tax rate. What is Kelly Company's effective tax rate in 2024? O A. 26.7% OB. 31.5% OC. 28.8% O D. 30.0%
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