Question

Woody Corp. had taxable income of $7,925 in the current year. The amount of MACRS depreciation...

Woody Corp. had taxable income of $7,925 in the current year. The amount of MACRS depreciation was $2,775, while the amount of depreciation reported in the income statement was $1,100. Assuming no other differences between tax and accounting income, Woody's pretax accounting income was:

Multiple Choice

$5,150.

$10,700.

$6,250.

$9,600.

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Answer #1

$9,600.

Working:

Taxable income $       7,925
Add:MACRS depreciation           2,775
Accounting Income before depreciation         10,700
Less:Depreciation reported in the income statement           1,100
Pretax Accounting Income $       9,600
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