Use the following information for questions 79 and 80.
Rowen, Inc. had pre-tax accounting income of $1,800,000 and a tax rate of 40% in 2015, its first year of operations. During 2015 the company had the following transactions:
-For 2015, what is the amount of income taxes payable for Rowen, Inc?

Question

Use the following information for questions 79 and 80.
Rowen, Inc. had pre-tax accounting income of $1,800,000 and a tax rate of 40% in 2015, its first year of operations. During 2015 the company had the following transactions: 
-For 2015, what is the amount of income taxes payable for Rowen, Inc?

Quizplus · Accepted Answer

Calculation of taxable income:
Pre-tax accounting income = $1,800,000
Add: Depreciation expense = $480,000
Less: Bad debt expense = ($60,000)
Taxable income = $2,220,000

Calculation of income taxes payable:
Taxable income = $2,220,000
Tax rate = 40%
Income taxes payable = $2,220,000 x 40% = $888,000
Less: Tax credits = ($233,600)
Income taxes payable = $654,400

Therefore, the answer is option B: $654,400.

Use the Following Information for Questions 79 and 80