Kelly Company has pretax accounting income of $100,000 for 2024. The following items were considered differences between pretax accounting and taxable income: 1. Interest on municipal bonds $9,000 2. Excess tax depreciation $4,000 3. Life insurance premiums on officers $5,000 4. Warranty expense $10,000; $8,000 in warranties actually paid. The company is subject to a 30% tax rate. What is Kelly Company's effective tax rate in 2024? O A. 26.7% OB. 31.5% OC. 28.8% O D. 30.0%
Kelly Company has pretax accounting income of $100,000 for 2024. The following items were considered differences between pretax accounting and taxable income: 1. Interest on municipal bonds $9,000 2. Excess tax depreciation $4,000 3. Life insurance premiums on officers $5,000 4. Warranty expense $10,000; $8,000 in warranties actually paid. The company is subject to a 30% tax rate. What is Kelly Company's effective tax rate in 2024? O A. 26.7% OB. 31.5% OC. 28.8% O D. 30.0%
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 47P
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Transcribed Image Text:Kelly Company has pretax accounting income of $100,000 for 2024. The following items were considered differences between pretax accounting and taxable income:
1. Interest on municipal bonds $9,000
2. Excess tax depreciation $4,000
3. Life insurance premiums on officers $5,000
4. Warranty expense $10,000; $8,000 in warranties actually paid.
The company is subject to a 30% tax rate. What is Kelly Company's effective tax rate in 2024?
O A. 26.7%
OB. 31.5%
OC. 28.8%
O D. 30.0%
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