Reconciling between Effective and Statutory Tax Rates Baltimore Inc. reported pretax GAAP income of $72,000 in 2020. In analyzing differences between GAAP income and taxable income, the company determined that it had deducted $9,000 in nondeductible fines and added $5,040 in tax-exempt municipal interest revenue to GAAP income. The statutory tax rate is 25%. Prepare a reconciliation between Baltimore Inc.'s effective and statutory tax rates. • Note: Round percentage to one decimal place (for example, enter 3.4 for 3.35%). Percentage Statutory tax rate 0 % Tax-exempt income 0% Non-deductible expense 0 % Effective tax rate 0 %
Reconciling between Effective and Statutory Tax Rates Baltimore Inc. reported pretax GAAP income of $72,000 in 2020. In analyzing differences between GAAP income and taxable income, the company determined that it had deducted $9,000 in nondeductible fines and added $5,040 in tax-exempt municipal interest revenue to GAAP income. The statutory tax rate is 25%. Prepare a reconciliation between Baltimore Inc.'s effective and statutory tax rates. • Note: Round percentage to one decimal place (for example, enter 3.4 for 3.35%). Percentage Statutory tax rate 0 % Tax-exempt income 0% Non-deductible expense 0 % Effective tax rate 0 %
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 37P
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