Question

In 2025 , Culver Corporation had pretax financial income of $164,000 and taxable income of $111,000. The difference is due to the use of different depreciation methods for tax and accounting purposes. The effective tax rate is 20%. Compute the amount to be reported as income taxes payable at December 31, 2025. Income taxes payable at December 31, 2025 $_____________.

Answer 1

To calculate the income taxes payable at December 31, 2025, multiply the taxable income by the effective tax rate.

To calculate the amount to be reported as income taxes payable at December 31, 2025, we need to determine the difference between pretax financial income and taxable income. In this case, pretax financial income is $164,000 and taxable income is $111,000. The difference is due to different depreciation methods.

The effective tax rate is 20%. We can calculate the income taxes payable by multiplying the taxable income by the effective tax rate. In this case, $111,000 * 0.20 = $22,200.

Therefore, the amount to be reported as income taxes payable at December 31, 2025 is $22,200.