Deriving permanent and temporary differences from financial statement disclosures. Pownall Company reports the following information for a
Question:
Deriving permanent and temporary differences from financial statement disclosures. Pownall Company reports the following information for a year:
Book Income before Income Taxes ........... $318,000
Income Tax Expense ................... 156,000
Income Taxes Payable for the Year ............. 48,000
Income Tax Rate on Taxable Income ............ 40%
The company has both permanent and temporary differences between book income and taxable income.
(a) What is the amount of temporary differences for the year? Give the amount, and indicate whether the effect is to make book income larger or smaller than taxable income.
(b) What is the amount of permanent differences for the year? Give the amount, and indicate whether the effect is to make book income larger or smaller than taxable income.
Step by Step Answer:
Pownall Company deriving permanent and temporary differences fro...View the full answer
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
