Question

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Flip's Pizzeria Inc. has the following financial items for the current year: Advertising Expenses $40,000 Cost of Goods Sold $350,000 Other Operating Expenses $330,000 Sales $2.720.000 Cost of Equipment purchased during the year (10 year estimate useful life, O salvage value) $585,000 Calculate Flip's taxable liability for the current year. SA Taxable Liability NM +0000

Answer 1

The Flip's Pizzeria Inc. taxable liability for the current year is $582,450.

Explanation to this is below in form of images :

First of which all is calculation liable to of Net Income, tax. sales of __ $ 2,720,000 (350,000) Less : Cost Goods Sold Less Less Less: Gross Income Advertising Expenses Other Operating Expenses Depreciation [Note 1 J 2,370,000 (4o,ooo) (330,000) (58,500) $ 1,941,500 Net Income Income tax) (liable to - Note 1 Calculation of Depreciation Depreciation - Cost of Equipment Useful life = $585,000 = $58,500 10 years Depreciation Expauses = $58,500

Tax liability for the current year! Taxable = $ 1,941,500 Income = 30% Tax Rate I & Taxable Amount = $1,941,500 @ 30% - $ 582,450 Hence, flip's Taxable ad Current year liability for the = $582, 450