Search This Blog

Wednesday, February 9, 2011

Computing taxable income for current year

Solution is available here for U$3.50
The following differnces between financial and taxable income were reported by Dider Corporation for the current year.

(a) Excess of tax depreciation over book depreciation              $60,000
(b) Interest revenue on municicpal bonds                             9,000
(c) Excess of estimated warranty expense over actual expenditures   54,000
(d) Unearned rent received                                          12,000
(e) Amortization of goodwill                                        30,000
(f) Excess of income reported under percentage-of-completion
    accounting for financial reporting over completed-contract
    accounting used for tax reporting                               45,000

(g) Interest on indebtedness incurred to purchase tax-exempt
    securities                                                       3,000
(h) Unrealized losses on marketable securites recognized for
    financial reporting                                             18,000

Assume that Dider Corporation had pretaz accounting income [before considering items (a) through (h)] of $900,000 for the current year. Compute the taxable income for the current year.

No comments:

Post a Comment