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recognition of tax benefits COB Company at the end of 2017, its first year of operations, prepared a reconciliation between pretax financial income and taxable
recognition of tax benefits COB Company at the end of 2017, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income. Estimated litigation expense. Installment sales . $1,200,000 3,000,000 (2.400,000) $1800,000 Taxable income$ The estimated litigation expense of $3,000,000 will be deductible in 2019 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $1,200,000 in each of the next two years. The income tax rate is 30%. 8. The income tax payable to be recognized is A. $360,000. B. $540,000. C. $720,000. D. $900,000
recognition of tax benefits
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