Greene Co. has pretax book income for the year ended December 31, 2018 in the amount of $285,000 and has a tax rate of 40%. Depreciation for tax purposes exceeded book depreciation by $13,500. What should Greene Co. record as its federal income tax liability for 2018?

Question

Quizplus · Accepted Answer

The taxable income is $285,000 - $13,500 = $271,500. The tax liability is 40% of $271,500, which equals $108,600.

Greene Co Has Pretax Book Income for the Year Ended December