Question
TarHeel Corporation reported pretax book income of $1,010,000. During the current year, the net reserve for warranties increased by $100,500. In addition, tax depreciation exceeded
TarHeel Corporation reported pretax book income of $1,010,000. During the current year, the net reserve for warranties increased by $100,500. In addition, tax depreciation exceeded book depreciation by $202,500. Finally, TarHeel subtracted a dividends received deduction of $52,000 in computing its current year taxable income. TarHeel's accounting effective tax rate is?
I ended up with 17.80%, but this was incorrect, trying to find the correct effective accounting tax rate, and the method for arriving at the answer to figure out where I was wrong.
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