Question

Novak Company reports pretax financial income of $72,600 for 2020. The following items cause taxable income to be different than pretax financial income. 1. 2. 3. Depreciation on the tax return is greater than depreciation on the income statement by $17,200. Rent collected on the tax return is greater than rent recognized on the income statement by $20,300. Fines for pollution appear as an expense of $9,900 on the income statement Novak's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. a) Your answer is correct. Compute taxable income and income taxes payable for 2020. Taxable income 85600 Income taxes payable 25680 eTextbook and Media List of Accounts Attempts: 1 of 3 used

Answer 1

Novak Company
Income Statement (Partial)
Year ended December 31, 2020
Income before income taxes		$72,600
Income Tax Expenses
Deferred	-$930
Current Income Tax	$25,680
		$24,750
Net Income / (Loss)		$47,850