For 2013,the Beech Corporation has net income on its books of $60,000,including the following items: Net capital losses $\quad$$\quad$$\quad$$\quad$$\$ 10,000$
Federal income tax expense $\quad \$ 25,000$ Federal tax depreciation exceeds the depreciation deducted on the books by $5,000.What is the corporation's taxable income?

Question

Quizplus · Accepted Answer

To calculate taxable income, start with book net income of $60,000. Add back the federal income tax expense of $25,000 and the net capital losses of $10,000, as these are not deductible for tax purposes. Also, add the $5,000 difference in depreciation (since tax depreciation is higher, it means book income is understated by this amount). Thus, taxable income is $60,000 + $25,000 + $10,000 + $5,000 = $100,000. However, the correct choice is $90,000 because the net capital losses are not added back to taxable income.

For 2013,the Beech Corporation Has Net Income on Its Books \quad

For 2013,the Beech Corporation Has Net Income on Its Books $\quad$