Problem 06-44 (LO 06-2) (Static) Akoto Corporation reported pretax book income of $2,000,000. Tax depreciation exceeded book depreciation by $500,000. During the year, the company capitalized $250,000 into ending inventory under §263A. Capitalized inventory costs of $150,000 in beginning inventory were deducted as part of cost of goods sold on the tax return. Compute the company's taxes payable or refundable. Note: Amounts to be deducted should be indicated by a minus sign. Answer is complete but not entirely correct. $2,000,000 Pretax book income Depreciation Inventory Taxable income Current income taxes payable (500,000) ✔ 100,000✔ $ 1,600,000✔✔ $ 1,600,000

Problem 06-44 (LO 06-2) (Static) Akoto Corporation reported pretax book income of $2,000,000. Tax depreciation exceeded book depreciation by $500,000. During the year, the company capitalized $250,000 into ending inventory under §263A. Capitalized inventory costs of $150,000 in beginning inventory were deducted as part of cost of goods sold on the tax return. Compute the company's taxes payable or refundable. Note: Amounts to be deducted should be indicated by a minus sign. Answer is complete but not entirely correct. $2,000,000 Pretax book income Depreciation Inventory Taxable income Current income taxes payable (500,000) ✔ 100,000✔ $ 1,600,000✔✔ $ 1,600,000

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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Km. 205.
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