Tuna Corporation reported pretax book income of $1,005,000. During the current year, the net reserve for warranties increased by $27,500. In addition, book depreciation exceeded tax depreciation by $105,000. Finally, Tuna subtracted a dividends received deduction of $17,500 in computing its current-year taxable income. Book equivalent of taxable income is:

Question

Quizplus · Accepted Answer

The Answer of Tuna Corporation reported pretax book income of $1,005,000. During the current year, the net reserve for warranties increased by $27,500. In addition, book depreciation exceeded tax depreciation by $105,000. Finally, Tuna subtracted a dividends received deduction of $17,500 in computing its current-year taxable income. Book equivalent of taxable income is:

Tuna Corporation Reported Pretax Book Income of $1,005,000