Question

At the end of the year, Bramble Co. has pretax financial income of $583,000. Included in the $583,000 is $74,200 interest income on municipal bonds, $26,500 fine for dumping hazardous waste, and depreciation of $63,600. Depreciation for tax purposes is $47,700. Compute income taxes payable, assuming the tax rate is 30% for all periods.

Answer 1

Answer: $‭165,360‬

Step-by-step explanation:

Taxable Income = Pretax income + fine for dumping waste - interest income on municipal bond + book depreciation - tax depreciation

= 583,000 + 26,500 - 74,200 + 63,600 - 47,700

= $551,200

Income taxes payable = 551,200 * 30%

= $‭165,360‬