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For the year ended December 31, 2018, Carla Co. reported pretax financial income of $292,912. Its...

For the year ended December 31, 2018, Carla Co. reported pretax financial income of $292,912. Its current tax payable was $52,637. Carla reported a difference between pretax financial statement income and taxable income. This difference is due to accelerated depreciation for income tax purposes. Carla’s income tax rate is 21% and Carla made no estimated tax payments during 2018.

What amount did Carla report as taxable income for 2018?

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Answer #1

The pretax financial income (or say Book Profits) of Carla Co. are of $292,912.
The current Tax Payable was $52,637.
Since there is no estimated tax payments during 2018, it means the tax liability of $52,637 is the Total Tax Liability of Carla Co.
Tax Rate is 21%.

Taking $52,637 as the 21% of Taxable Income of Carla Co., we can calculate the Taxable Income as follows :
Taxable Income x 21% = $52,637
Taxable Income = $52,637 / 21% = $250,652

Therefore, the taxable income for 2018 of Carla Co. will be $250,652.

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