The following information is available for Bridgeport Corporation for 2020.
1.CCA that was reported on the 2020 tax return exceeded depreciation reported on the income statement by $128,000. This difference is expected to reverse in equal amounts of $32,000 per year over the period 2021 to 2024.
2.Dividends received from taxable Canadian corporations were $18,400.
3.Rent collected in advance on January 1, 2020 totalled $72,000 for a three-year period. Of this amount, $48,000 was reported as unearned for book purposes at December 31, 2020.
4.The tax rates are 25% for 2020 and 30% for 2021 and subsequent years.
5.Income taxes payable are $160,000 for 2020.
Calculate taxable income.
Taxable income$enter Taxable income in dollars
Calculate accounting income for 2020.
Accounting income for 2020$enter the Accounting income for 2020 in dollars
Answer-a:
Let the taxable income be "X"
20% of X = $160,000
X = $160,000/20% = $800,000
Hence, the taxable income would be $800,000
Answer-b:
Calculation of Accounting income for 2020 | |
Taxable income | $ 8,00,000 |
Excess depreciation | 1,28,000 |
Dividend received | 18,400 |
Unearned rent | -48,000 |
Accounting Income | $ 8,98,400 |
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