Packer Co.'s year 5 income statement reported $130,000 in income before provisions for income taxes. To compute the provision for federal income taxes, the following year 5 data are provided:

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 purposes $10,000

What amount should Packer report as taxable income?

Question

Romeo Weaver

Business

2 May, 17:13

Packer Co.'s year 5 income statement reported $130,000 in income before provisions for income taxes. To compute the provision for federal income taxes, the following year 5 data are provided:

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 purposes $10,000

What amount should Packer report as taxable income?

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Answers (1)

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Mareli Patel · Answer 1

The taxable income is $127,000

Explanation:

The computation of the taxable income is shown below:

= Income before provisions for income taxes + Rent received in advance - Income from exempt municipal bonds - Depreciation deducted for income tax purposes + Depreciation deducted for financial purposes

= $130,000 + $22,000 - $17,000 - $18,000 + $10,000

= $127,000

Thus, All items should be considered