For 2017,Wasabi Company has accounting revenues of $6,000.However,because of temporary differences between tax and accounting,$1,000 of this is not subject to tax.If expenses are $3,000 for both tax and accounting,and the tax rate is 40%,what is the amount of tax payable to the IRS?

Question

Quizplus · Accepted Answer

The taxable income for tax purposes is $6,000 - $1,000 (because of the temporary difference) - $3,000 (expenses) = $2,000. 
The tax payable is then $2,000 x 40% = $800. Therefore, the best choice is B.

For 2017,Wasabi Company Has Accounting Revenues of $6,000