Question
Use the following information for questions 5 and 6 . Rowen, Inc. had pre-tax accounting income of $1,672,000 and a tax rate of 40% in
Use the following information for questions 5 and 6.
Rowen, Inc. had pre-tax accounting income of $1,672,000 and a tax rate of 40% in 2015, its first year of operations. During 2015 the company had the following transactions:
Received rent from Jane, Co. for 2016 | $64,000 |
Municipal bond income | $80,000 |
Depreciation for tax purposes in excess of book depreciation | $40,000 |
Installment sales revenue to be collected in 2016 | $108,000 |
5. For 2015, what is the amount of income taxes payable for Rowen, Inc?
a. $603,200
b. $654,400
c. $686,400
d. $772,800
6. At the end of 2015, which of the following deferred tax accounts and balances is reported on Rowen, Inc.s balance sheet?
Account _ Balance
a. Deferred tax asset $32,000
b. Deferred tax liability $32,000
c. Deferred tax asset $59,200
d. Deferred tax liability $59,200
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