Hello guys, I'm studying for cap far, and a lot of trouble answering questions for inter period tax. anyone can help?
thanks a lot!
Dunn Co.'s income statement reported $90,000 income before provision for income taxes. To compute the provision for federal income taxes, the following data are provided:
-Rent received in advance $16,000
-Income from exempt municipal bonds $20,000
-Depreciation deducted for income tax purposes in excess of depreciation reported for financial statement purposes $10,000
-Enacted corporate income tax rate 30%
What amount of current income tax liability should be reported in Dunn's Decemeber 31 balance sheet?
Choice "c" is correct. The current tax liability is computed by multiplying the tax rate of 30% times taxable income.
I thought the answer would be: $19,800
can some smart person help me understand? maybe its translation from chinese to english that i don't understand? thanks!