Problem 16-44 (LO. 6) HippCo Federal taxable income for the year is $1,000,000. Its operations are confined to Oregon and Montana. HippCo generates only business and interest income for the year. Federal cost recovery deductions totaled $200,000. Montana used this amount, but Oregon allowed only $120,000. Interest income of $25,000 from Oregon bonds was excluded from Federal taxable income. Oregon taxes all municipal bond income, while Montana taxes all such interest except that from its own bonds. Interest income from Treasury bonds that was recognized on the Federal return came to $11,000. Neither state taxes such income. Oregon's state taxable income is $ and Montana's state taxable income is $.
Oregon’s Federal taxable income |
1000000 |
Cost recovery (200000-120000) |
80000 |
Municipal bond interest |
25000 |
Treasury bond interest |
(11000) |
Oregon's state taxable income |
$1094000 |
Montana’s Federal taxable income |
1000000 |
Municipal bond interest |
25000 |
Treasury bond interest |
(11000) |
Montana's state taxable income |
$1014000 |
Problem 16-44 (LO. 6) HippCo Federal taxable income for the year is $1,000,000. Its operations are...
Packard Corporation reported taxable income of $1,000,000 in 20X3 and paid federal income taxes of $340,000. Included in the taxable income computation was a dividends received deduction of $5,000, a net capital loss carryover from 20x2 of $10,000 utilized in 20X3, and gain of $50,000 recognized on the collection of cash from an installment sale that took place in 20X1. The corporation's current E&P for 20X3 would be: Multiple Choice Ο $1,015,000. Ο $965,000. Ο $675,000. Ο $625,000.
Problem 7-39 (LO 7-2) Gator Inc. reported taxable income of $1,000,000 this year and paid federal income taxes of $210,000. Included in the company's computation of taxable income is gain from the sale of a depreciable asset of $50,000. The income tax basis of the asset was $100,000. The E&P basis of the asset using the alternative depreciation system was $175,000. Compute the company's current E&P. (Negative amount should be indicated with a minus sign.) points Print Current E&P
M Corporation reported 2018 book net income of $185,000. The following items were included in book income for 2018: State A income tax expense $ 15,000 State B income tax expense $ 5,000 Federal income tax expense $49,000 Book depreciation expense $ 18,000 Municipal bond interest income $ 10,000 US government obligation interest income $ 12,000 Dividends received from 5% owned US co. $ 8,000 Separately, M Corporation computed federal tax depreciation of $26,000. A) Based on the above, compute...
Problem 2: ABC, Inc. reported pretax financial income of $80,000 for its first year of operations. The tax rate for the current and future years is 25%. The following items caused financial income and taxable income to differ: A. Depreciation on the tax return is greater than the depreciation on the income statement by $10,000. B. Rent collected on the tax return is greater than rent recognized on the income statement by $18,000. C. Interest of $15,000 was collected on...
9. Rose Corporation (a calendar year taxpayer) has taxable income of $300,000, and its financial records reflect the following for the year. Federal income taxes paid Net operating loss carryforward deducted currently Gain recognized this year on an installment sale from a prior year Depreciation deducted on tax return (ADS depreciation would have been $10,000) Interest income on lowa state bonds $110,000 70,000 44,000 40,000 8,000 Rose Corporation's current E & P is: a. $254,000 b. $214,000. c. $194,000. d....
Problem 5-25 (LO. 1, 2) Cardinal Corporation, a calendar year taxpayer, receives dividend income of $250,000 from a corporation in which it holds a 10% interest. Cardinal also receives interest income of $35,000 from municipal bonds. (The municipality used the proceeds from the bond issue to construct a library.) Cardinal borrowed funds to purchase the municipal bonds and pays $20,000 of interest on the loan. Excluding these three items, Cardinal's taxable income is $500,000. Cardinal has $150,000 of accumulated E...
Chipper Corporation realized $1,000,000 apportionable taxable income from the sales of its products in States X and Z. Both states use the same measure of pre-apportionment taxable income. Chipper’s activities establish nexus for income tax purposes only in Z, the state of its incorporation. Chipper’s sales, payroll, and property among the states include the following. State X State Z Totals Sales $1,000,000 $2,000,000 $3,000,000 Property 0 2,300,000 2,300,000 Payroll 0 1,900,000 1,900,000 X utilizes a sales-only factor in its three-factor apportionment formula. How much of Chipper’s apportionable income is taxed by...
EFG, a calendar year, accrual basis corporation, reported $479,900 net income after tax on its financial statements prepared in accordance with GAAP. The corporation’s financial records reveal the following information: EFG earned $10,700 on an investment in tax-exempt municipal bonds. EFG’s allowance for bad debts as of January 1 was $21,000. Write-offs for the year totaled $4,400, while the addition to the allowance was $3,700. The allowance as of December 31 was $20,300. On August 7, EFG paid a $6,000...
the wendt corporation reported $30 million of taxable income. its federal tax rate was 21%( ignore any possible state corporate taxes). a what is the companys federal income tax bill for the year b) assume the firm receives an additional $2 million of interest income from some bond it owns. what is the additional tax on this interest income. c) now assume that wendt does not receive the interest but does receive an additional $ 2 million as dividends on...
The following differences enter into the reconciliation of financial income and taxable income of Abbott Company for the year ended December 31, 2017, its first year of operations. The enacted income tax rate is 30% for all years. Pretax accounting income $800,000 Excess tax depreciation (480,000) Litigation accrual 70,000 Unearned rent revenue deferred on the books but appropriately recognized in taxable income 60,000 Interest income from New York municipal bonds (20,000) Taxable income $430,000 1. Excess tax depreciation will reverse equally over a four-year period, 2018-2021. 2. It...