Ann Corporation reported pretax book income of $1,860,000. Included in the compu

Question

Ann Corporation reported pretax book income of $1,860,000. Included in the computation were favorable temporary differences of $142,500, unfavorable temporary differences of $125,000, and favorable permanent differences of $180,000. Compute the company’s book equivalent of taxable income. Use this number to compute the company’s total income tax provision or benefit.

1) Find Book Equiv.

2) Find Total Income Tax Provision/Benefit

Marginal Tax Rate, 2018: 21%

Ann Corporation reported pretax book Income of $1.860,000. Included In the computation were favorable temporary differences of $142,500, unfavorable temporary differences of $125,000, and favorable permanent differences of $180,000. Compute the company's book equivalent of taxable Income. Use this number to compute the company's total Income tax provislon or benefit. Book equivalent of taxable

Explanation / Answer

Solution :

Book equivalent taxable income, takes into account only permanant differences.

Computation of Book Equivalent of Taxable Income - Ann Corporation Particulars Amount Pre tax book income $1,860,000.00 Less: Favorable permanent differences $180,000.00 Book Equivalent of taxable income $1,680,000.00 Total income tax provision (21%) $352,800.00

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.