Sunland Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $3330000 Estimated litigation expense 4330000 Extra depreciation for taxes (6324000) Taxable income $   1336000 The estimated litigation expense of $4330000 will be deductible in 2021 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $2108000 in each of the next 3 years. The income tax rate is 20% for all years. Income taxes payable is $598800 $398800 0 $267200

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Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.