Question

Tamarisk Corporation has one temporary difference at the end of 2017 that will reverse and cause taxable amounts of $57,800 in 2018, $62,500 in 2019, and $67,300 in 2020. Tamarisk’s pretax financial income for 2017 is $319,400, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2017.

Compute taxable income and income taxes payable for 2017.

Taxable income		$enter a dollar amount
Income taxes payable		$enter a dollar amount

Answer 1

Answer:
Particulars	Amount (in $ )
Pretax financial income	$ 319,400
Less: Temporary taxable amounts differences              ( $ 57,800 + $ 62,500 + $ 67,300 )	($ 187,600)
Taxable income	$ 131,800
Income taxes payable           = Taxable income x Tax rate           =   $ 131,800 x 30%	$ 39,540