The Indy Company had taxable income of $12,000 during 2011. Indy used accelerated depreciation for tax purposes ($3,400) and straight-line depreciation for accounting purposes ($2,000). Assuming Indy had no other temporary differences, what would the company's pretax accounting income be for 2011?

Question

Quizplus · Accepted Answer

The pretax accounting income is calculated by adding back the difference in depreciation methods to the taxable income: $12,000 + ($3,400 - $2,000) = $13,400.

The Indy Company Had Taxable Income of $12,000 During 2011