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Chapter 19: Question 1BE (page 1093)

In 2017, Amirante Corporation had pretax financial income of \(168,000 and taxable income of \)120,000. The difference is due to the use of different depreciation methods for tax and accounting purposes. The effective tax rate is 40%. Compute the amount to be reported as income taxes payable at December 31, 2017.

Short Answer

Expert verified

Financial income is the type of income or revenuean organization earns from its investment into various financial securities that are short-term in nature.

Step by step solution

01

Given are the amounts

Particulars

Amount

Pretax financial income

$168,000

Taxable income

$120,000

Effective tax rate

40%

02

Computation of income tax payable for December 31, 2017

Incometaxpayable=TaxableIncome脳Taxrate=$120,000脳40%=$48,000

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