E6

30 percent shares outstanding) Sales $ 555,000 Cost of goods sold (275,000) Operating expenses (112,500) Restructuring (55,000) Total income taxes expense for period (89,550) Income from discontinued operations 80,000 Gain on disposal of discontinued operations 70,000 Extraordinary gain 36,000 Net income $ 208,950 Earnings per share $ 2.09 Corporate Income Tax Rate Schedule E6. Using the corporate tax rate schedule in Table 14-1, compute the income tak liability for the following situations: Situation Taxable income $70,000 B 85.000 320,000 p622 Chapter Assignments 645 dtv RA MacBook Air QSFOR 2 O, Q Search ons Tax Liability of the Amount Over Taxable income But Not Over Over $ 50,000 $ 50,000 75,000 75,000 100,000 100,000 335,000 335,000 10,000,000 10,000,000 15,000,000 15,000,000 18,333,333 18,333,333 Noter tax rates are subject to charger by Congress 0 + 15% $ 7,500 + 25% 13,750+ 34% 22.250 + 39% 113,900 + 34% 3,400,000 + 35% 5,150,000+ 38% 6,416,667 + 35% $ 50,000 75,000 100,000 335,000 10,000,000 15,000,000 18,333,333 concept, cannot let tax procedures dictate their method of preparing financial statements if the result would be misleading. The difference between accounting income and taxable income, especially in large businesses, can be material. This discrepancy can result from differences in the timing of the recognition of rer enues and expenses under accrual accounting and the tax method. The following table shows some possible variations Accrual Accounting The Method Expense recognition Accrual or dcferral At time of expenditure Accounts receivable Allowance Direct charge off Inventonics Average cost FIFO Depreciation Straight line Accelerated cost recovery Deferred Income Taxes Income tax allocation is the method used to accrue income taxes expense on the basis of accounting income when accounting income and tacable income differ. The tv MacBook Air