Question

PLEASE SHOW ALL WORK AND EXPLAIN For the year ended December 31, 2018, Carla Co. reported pretax financial income of $246,148. Its current tax payable was $33,589. Carla reported a difference between pretax financial statement income and taxable income. This difference is due to accelerated depreciation for income tax purposes. Carla’s income tax rate is 21% and Carla made no estimated tax payments during 2018. What amount of accelerated depreciation did take in 2018?

Answer 1

current tax payable = $33,589

Current tax payable = Taxable income x Tax rate

33,589 = Taxable income x 21%

Hence, taxable income = 33,589 x 100/21

= $159,948

Carla reported a difference between pretax financial statement income and taxable income. This difference is due to accelerated depreciation for income tax purposes.

Hence, accelerated depreciation = Pretax financial statement income - Taxable income

= 246,148 - 159,948

= $86,200

Hence, accelerated depreciation in 2018 = $86,200