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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?

Respuesta :

Answer:

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

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