Cullumber Corp.\'s 2018 income statement showed pretax accounting income of $260

Question

Cullumber Corp.'s 2018 income statement showed pretax accounting income of $2600000. To compute the federal income tax liability, the following 2018 data are provided:
Income from exempt municipal bonds $101000 Depreciation deducted for tax purposes in excess of depreciation
     deducted for financial statement purposes 210000 Estimated federal income tax payments made 520000 Enacted corporate income tax rate 30%
What amount of current federal income tax liability should be included in Cullumber's December 31, 2018 balance sheet?

$686700 $260000 $166700 $229700

Explanation / Answer

Amount of current federal income tax liability to be included in balance sheet = (2600000-101000-210000)*30%-520000= 166700 Option 3 is correct

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