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26 January, 02:39

Fleming Company has the following cumulative taxable temporary differences: 12/31/18 12/31/17 $1,600,000 $2,250,000 The tax rate enacted for 2018 is 40%, while the tax rate enacted for future years is 30%. Taxable income for 2018 is $4,000,000 and there are no permanent differences. Fleming's pretax financial income for 2018 is:

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  1. 26 January, 03:02
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    Pretax financial income is $3,350,000.00

    Explanation:

    Fleming's pretax financial income is the taxable income for 2018 plus the increase in cumulative taxable temporary difference in 2018.

    Taxable income is $4,000,000

    Difference in cumulative taxable difference=$1,600,000-$2,250,000

    =-$650,000

    pretax financial income=$4,000,000 + (-$650,000)

    =$4,000,000-$650,000

    =$ 3,350,000.00

    The pretax financial income for year 2018 is $3,350,000.00
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