Final answer:
To calculate Sarasota Corporation's tax payable for 2024, we consider the excess of tax depreciation over book depreciation and deferral of rent received in advance, along with pretax financial income, at a tax rate of 20%. The taxable income for 2024 is the reported pretax financial income of $310,100. The tax payable for 2024 is 20% of the taxable income, totaling $62,020.
Step-by-step explanation:
Calculating Sarasota Corporation's Taxable Income and Deferred Taxes for 2024
To calculate the tax payable by Sarasota Corporation for its first year of operations, we need to consider the differences between financial accounting and tax accounting.
Given are an excess of tax depreciation over book depreciation, deferral of rent received in advance, pretax financial income, and the constant tax rate.
Step 1: Adjust for Depreciation Differences
The excess of tax depreciation over book depreciation is $36,800. This difference will reverse equally over four years, which means an additional $9,200 ($36,800 / 4) of taxable income will be recognized each year from 2025 to 2028 for book purposes.
Step 2: Adjust for Rent Received in Advance
For the deferral of rent received in advance, $20,200 will be recognized as revenue for tax purposes in 2025.
Step 3: Calculate Taxable Income for 2024
The pretax financial income for 2024 is reported as $310,100. Since the rent will be recognized in the following year and the depreciation reversal has not started yet, no adjustments are necessary for the current year's taxable income.
Therefore, the taxable income for 2024 is $310,100.
Step 4: Calculate Tax Payable
With a tax rate of 20%, the tax payable for 2024 is 20% of $310,100, which equals $62,020.