Sagehen Enterprises reports pretax financial income of $80,000 for 2012. The following cause taxable income to be different from pretax financial income: Depreciation on the tax return is greater than depreciation on the income statement by $15,000. Rent collected on the tax return is $25,000 greater than rent earned on the income statement. Fines reported on the income statement were $10,000. The current tax rate is 30%. There are no deferred taxes at the beginning of 2012. Compute taxable income and income tax payable for 2012. Which of the differences are temporary, and which are permanent?

SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 14P
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Sagehen Enterprises reports pretax financial income of
$80,000 for 2012. The following cause taxable income to be
different from pretax financial income: Depreciation on the
tax return is greater than depreciation on the income
statement by $15,000. Rent collected on the tax return is
$25,000 greater than rent earned on the income statement.
Fines reported on the income statement were $10,000. The
current tax rate is 30%. There are no deferred taxes at the
beginning of 2012. Compute taxable income and income tax
payable for 2012. Which of the differences are temporary, and
which are permanent?
Transcribed Image Text:Sagehen Enterprises reports pretax financial income of $80,000 for 2012. The following cause taxable income to be different from pretax financial income: Depreciation on the tax return is greater than depreciation on the income statement by $15,000. Rent collected on the tax return is $25,000 greater than rent earned on the income statement. Fines reported on the income statement were $10,000. The current tax rate is 30%. There are no deferred taxes at the beginning of 2012. Compute taxable income and income tax payable for 2012. Which of the differences are temporary, and which are permanent?
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