Question
Eckert Corporation's partial income statement after its first year of operations is as follows: Income before income taxes $3,750,000 Income tax expense Current $1,035,000 Deferred
Eckert Corporation's partial income statement after its first year of operations is as follows:
Income before income taxes | $3,750,000 | |
Income tax expense | ||
Current | $1,035,000 | |
Deferred | 90,000 | 1,125,000 |
Net income | $2,625,000 |
Eckert uses the straight-line method of depreciation for financial reporting purposes and accelerated depreciation for tax purposes. The amount charged to depreciation expense on its books this year was $2,400,000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 30% tax rate, what amount was deducted for depreciation on the corporation's tax return for the current year?
A. $2,700,000 B. $1,125,000 C. $2,400,000 D. $2,100,000 |
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