Question
Reconciling between Effective and Statutory Tax Rates Baltimore Inc. reported pretax GAAP income of 99,000 in 2020. In analyzing differences between GAAP income and taxable
Reconciling between Effective and Statutory Tax Rates
Baltimore Inc. reported pretax GAAP income of 99,000 in 2020. In analyzing differences between GAAP income and taxable income, the company determined that it had deducted $13,000 in nondeductible fines and added $7,280 in tax-exempt municipal interest revenue to GAAP income. The statutory tax rate is 25%.
Prepare a reconciliation between Baltimore Inc.s effective and statutory tax rates.
- Note: Enter the percent rounded to one digit after the decimal; for example, enter 8.4 for 8.44%, or 8.5 for 8.45%.
| Percentage | |
|---|---|
| Statutory tax rate | |
| Tax-exempt income | |
| Non-deductible expense | |
| Effective tax rate |
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Financial Accounting An Integrated Statements Approach
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
2nd Edition
324312113, 978-0324312119
