SUBJECT ACCOUNT - Assume that Spring, Inc. reported net income before taxes for financial statement purposes of $52,000,000. For tax purposes, adjustments need to be made for the following items. Bad debt expense for book using the reserve method: $2,400,000 Accounts actually written off: $3,100,000 Interest income on municipal bonds: $500,000 Depreciation expense reported for book: $2,400,000 Depreciation expense deductible on current year tax return: $3,000,000 What is Spring's current year taxable income? (NOTE: The items listed above are included, where appropriate, in the company's book income). a. $50,200,000 b. $51,600,000 c. $52,600,000 d. $51,200,000
SUBJECT ACCOUNT - Assume that Spring, Inc. reported net income before taxes for financial statement purposes of $52,000,000. For tax purposes, adjustments need to be made for the following items. Bad debt expense for book using the reserve method: $2,400,000 Accounts actually written off: $3,100,000 Interest income on municipal bonds: $500,000 Depreciation expense reported for book: $2,400,000 Depreciation expense deductible on current year tax return: $3,000,000 What is Spring's current year taxable income? (NOTE: The items listed above are included, where appropriate, in the company's book income). a. $50,200,000 b. $51,600,000 c. $52,600,000 d. $51,200,000
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 47P
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Transcribed Image Text:SUBJECT ACCOUNT
-
Assume that Spring, Inc. reported net income before
taxes for financial statement purposes of
$52,000,000. For tax purposes, adjustments need to
be made for the following items.
Bad debt expense for book using the reserve
method: $2,400,000
Accounts actually written off: $3,100,000
Interest income on municipal bonds: $500,000
Depreciation expense reported for book: $2,400,000
Depreciation expense deductible on current year tax
return: $3,000,000
What is Spring's current year taxable income?
(NOTE: The items listed above are included, where
appropriate, in the company's book income).
a. $50,200,000
b. $51,600,000
c. $52,600,000
d. $51,200,000
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