Question
For 20x5, before considering differences between books and tax, revenues recognized by a firm for both books and tax are $400,000 and expenses (deductions) for
For 20x5, before considering differences between books and tax, revenues recognized by a firm for both books and tax are $400,000 and expenses (deductions) for both books and tax are $300,000. Therefore, before considering differences between the two reporting systems, income before tax is $100,000 for both systems. In addition to the $100,000 amount, the firm paid a nondeductible $50,000 fine for polluting the American river in October 20x5. The firm had no deferred tax account balances at 1/1/x5. The tax rate is 30%. What amount is reported as income tax expense for 20x5?
a. 35,000 | ||
b. 25,000 | ||
c. 15,000 | ||
d. 30,000 | ||
e. 9,000 |
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