Question

For the current year ($ in millions), Central Park Corp. had $80 in pretax accounting income. This included bad debt expense of $6 based on the allowance method, and $20 in depreciation expense. Two million in receivables were written off as uncollectible, and MACRS depreciation amounted to $35. In the absence of other temporary or permanent differences, what was Central Park's taxable income

Answer 1

$69

Step-by-step explanation:

Calculation for Central Park's taxable income

Pretax accounting income $80

Less Temporary differenceDepreciation (15)

($35 – $20)

Bad debt expense $4

($6 – $2)

Taxable income$69

($80-$15+$4)

Therefore Central Park's taxable income will be $69