T12S-Chp-05-7-Review-Tax-Accounting

T12S-Chp-05-7-Review-Tax-Accounting - Tab: Problem File:

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Tab: Problem File: f0ccefb1a6ecfa30fe40a17e14dfae12a32ec166.xls Page 1 of 2 Review of Income Tax Accounting vs. GAAP Accounting Principles Charlotte Corporation provided the following information in its first year. Revenue $800,000 Provision for bad debts 9,000 Other expenses 390,000 Amount of bad debts written off during year 5,000 Ending balance in Accounts Receivable 200,000 Entry for write-off: debit the allowance account and credit accounts receivable. Expenses above do not include accrual for federal income taxes or any payment of such taxes. There is no state income tax. Assume federal corporate income tax rate is 40% for all years. The federal income tax law requires that the direct charge-off method be used on the tax return. 1 What is the amount of net income before income tax on the GAAP financial statements? a. $396,000 b. $401,000 c. $405,000 $410,000 e. Other 2 What is the amount of taxable income for the year? a. $396,000 b. $401,000 c. 405,000 $410,000 e. Other 3 What is the amount of income tax expense in the GAAP income statement? a. $158,400 b. $160,400 c. $162,000 $164,000 e. Other 4 What is the amount of income tax payable for the year? a. $158,400 b. $160,400 c. $162,000 $164,000 e. Other 5 a. $591,000 b. $595,000 c. $600,000 $800,000 e. Other Use the following information for the next two questions Jan started JanCorp (corporation) on 1-1-10. JanCorp owns an office building and rents
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This note was uploaded on 03/09/2012 for the course ACCT 4220 taught by Professor Burton during the Spring '08 term at UNC Charlotte.

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T12S-Chp-05-7-Review-Tax-Accounting - Tab: Problem File:

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