Question

Question 2 --/1 View Policies Current Attempt in Progress Vaughn Company reports pretax financial income of $63,900 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by $17,600. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $23,300. 3. Fines for pollution appear as an expense of $11,800 on the income statement. Vaughn's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. Compute taxable income and income taxes payable for 2020. Taxable income $ Income taxes payable $

Answer 1

Answer Taxable income Income Tax Payable $81,400 $24,420 Explanations Computation of Taxable income and Income Taxes Payable for 2020 Pretax financial income for 2020 Excess Depreciation per tax return Excess Rent collected over Rent earned Nondeductible Fines Taxable income $63,900 ($17,600) $23,300 $11,800 $81,400 Income Tax Payable = $81,400 x 30% = $24,420