1. Prior to 2020, taxable income and pretax financial income were identical. 2. Pretax financial income is $1,634,000 in 2020 and $1,359,000 in 2021. On January 1, 2020, equipment costing $1,260,000 is purchased. It is to be depreciated on a straight-line basis over 5 years for tax purposes and over 8 years for financial reporting purposes. (Hint: Use the half-year convention for tax purposes, as discussed in Appendix 11A.) 3. 4. Interest of $57,000 was earned on tax-exempt municipal obligations in 2021. 5. Included in 2021 pretax financial income is a gain on discontinued operations of $195,000, which is fully taxable. 6. The tax rate is 20% for all periods. 7. Taxable income is expected in all future years. (a) Compute taxable income and income taxes payable for 2021. Taxable income $ Income taxes payable 2$

1. Prior to 2020, taxable income and pretax financial income were identical. 2. Pretax financial income is $1,634,000 in 2020 and $1,359,000 in 2021. On January 1, 2020, equipment costing $1,260,000 is purchased. It is to be depreciated on a straight-line basis over 5 years for tax purposes and over 8 years for financial reporting purposes. (Hint: Use the half-year convention for tax purposes, as discussed in Appendix 11A.) 3. 4. Interest of $57,000 was earned on tax-exempt municipal obligations in 2021. 5. Included in 2021 pretax financial income is a gain on discontinued operations of $195,000, which is fully taxable. 6. The tax rate is 20% for all periods. 7. Taxable income is expected in all future years. (a) Compute taxable income and income taxes payable for 2021. Taxable income $ Income taxes payable 2$

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 5MC: At the beginning of 2019, Conley Company purchased an asset at a cost of 10,000. For financial...

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