Question

30 Haag Corp.'s 2021 income statement showed pretax accounting income of $2,500,000. To compute the federal income tax liability, the following 2021 data are provided: Income from exempt municipal bonds $ 100,000 Depreciation deducted for tax purposes in excess of depreciation deducted for financial statement purposes 200,000 Estimated federal income tax payments made 290,000 Enacted corporate income tax rate 20% What amount of current federal income tax liability should be included in Hagg's December 31, 2021 balance sheet?

$110,000

$150,000

$170,000

$440,000

Answer 1

Answer = $150,000

Explanation:

Current Federal Income Tax Liability

={( ( pretax accounting income -  Income from exempt municipal bonds - Depreciation deducted for tax purposes in excess of depreciation deducted for financial statement purposes ) * Enacted corporate income tax rate) - Estimated federal income tax payments }

= {(( $25,00,000 - $1,00,000 - $2,00,000 ) * 20% ) - $2,90,000

= ( $22,00,000 * 20% ) - $2,90,000

= $4,40,000 - $2,90,000

= $1,50,000