Homework SourseQuestion 13 At the end of the year Shamrock Co has pretax fi
Question 13
At the end of the year, Shamrock Co. has pretax financial income of $538,000. Included in the $538,000 is $65,000 interest income on municipal bonds, $24,000 fine for dumping hazardous waste, and depreciation of $62,800. Depreciation for tax purposes is $47,100. Compute income taxes payable, assuming the tax rate is 30% for all periods.
Income Taxes Payable: $ _________
**With calculations / explanation on how to calculate please
Solution
Solution :
| Computation of Taxable Income and Income tax payable - Shamrock Co | |
| Particulars | Amount |
| Pre tax financial income | $538,000.00 |
| Less: Interest income from muncipal bond | $65,000.00 |
| Add: fine for dumping hazardous waste | $24,000.00 |
| Add: Depreciation as per books | $62,800.00 |
| Less: Depreciation as per income tax | $47,100.00 |
| Taxable Income | $512,700.00 |
| Income tax payable (30%) | $153,810.00 |
