Carla Corporation reports pretax financial income of $262,600 for 2020. The following items cause taxable income to be differentthan pretax financial income.1.Rental income on the income statement is less than rent collected on the tax return by $62,300.2.Depreciation on the tax return is greater than depreciation on the income statement by $43,200.3.Interest on an investment in a municipal bond of $5,900 on the income statement.Carla' tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxesat the beginning of 2020.(a)Compute taxable income and income taxes payable for 2020.Taxable income$Income taxes payable2$

Solution: (a). Taxable income for 2020 = Pretax financial income + Rental income - Depreciation -…

Answered: Carla Corporation reports pretax…

Carla Corporation reports pretax financial income of $262,600 for 2020. The following items cause taxable income to be diffe than pretax financial income.

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Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 20CE

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Question

100%

Carla Corporation reports pretax financial income of $262,600 for 2020. The following items cause taxable income to be different
than pretax financial income.
1.
Rental income on the income statement is less than rent collected on the tax return by $62,300.
2.
Depreciation on the tax return is greater than depreciation on the income statement by $43,200.
3.
Interest on an investment in a municipal bond of $5,900 on the income statement.
Carla' 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.
(a)
Compute taxable income and income taxes payable for 2020.
Taxable income
$
Income taxes payable
2$

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