Question

For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 350,000 Permanent difference (14,700 ) 335,300 Temporary difference-depreciation (19,900 ) Taxable income $ 315,400 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its income tax expense for its first year of operations

Answer 1

Tringali should report $78,850 as its income tax expense for its first year of operation.

Step-by-step explanation:

The company should use the taxable income of $305,600 to calculate it's income tax expense as it is only on it basis that the tax payable by a firm is determine

Income tax expenses = Taxable income * Tax rate

Income tax expenses = $315,400 x 25%

Income tax expenses = $78,850