Teal Corporation has taxable income of $320,000. The corporation had total travel and entertainment expenses of $50,000, charitable contributions of $10,000, and tax depreciation in excess of book depreciation of $45,000. Without regard to tax expense for financial statement purposes, what is the book net income of Teal?

Question

Quizplus · Accepted Answer

The book net income is calculated by adjusting the taxable income for non-deductible expenses and differences between tax and book depreciation. Starting with taxable income of $320,000, add back the excess tax depreciation of $45,000, and subtract the non-deductible portion of travel and entertainment expenses (assuming all are non-deductible for simplicity), resulting in a book net income of $340,000.

Teal Corporation Has Taxable Income of $320,000