Homework SoursePacker Cos 2018 income statement reported 130000 in income b
Packer Co.’s 2018 income statement reported $130,000 in income before provisions for income taxes. To compute the provision for federal income taxes, the following 2018 data are provided:
If the alternative minimum tax provisions are ignored, what amount should Packer report as taxable income?
Multiple Choice
130,000
117,000
125,000
127,000
| Rent received in advance | $ | 22,000 |
| Income from exempt municipal bonds | $ | 17,000 |
| Depreciation deducted for income tax purposes | $ | 18,000 |
| Depreciation deducted for financial reporting | $ | 10,000 |
Solution
Answer--D. $127000
Amount should Packer report as taxable income:-
Pre-tax accounting income $130,000
Add- advance rent (taxable, but not included in pre-tax accounting income) $22,000
Less- municipal bond income (this is included in pre-tax accounting income, but is not taxable) ($17,000)
Less -depreciation for tax in excess of depreciation for the books ($8,000)
Equals taxable income $127,000
