Question
In 2014, Waterford Corporation reported pretax financial income of $400,000. Included in that pretax financial income was: $150,000 of nontaxable life insurance proceeds received as
In 2014, Waterford Corporation reported pretax financial income of $400,000.
Included in that pretax financial income was:
$150,000 of nontaxable life insurance proceeds received as a result of the death of an officer; $120,000 of warranty expenses accrued but unpaid as of December 31, 2014; and $10,000 of bad debts estimated to be uncollectible (but not written off as of December 31, 2014). Assuming that no income taxes were previously paid during the year and an income tax rate of 30%, the amount of income taxes payable on December 31, 2014, would be:
a. | $114,000 |
b. | $108,000 |
c. | $42,000 |
d. | $126,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started