Question
Week 6 CPA Problems E18-11 Multiple Tax Rates For the year ended December 31, 2016, Nelson Co's income statement showed income of $435,000 before income,
Week 6 CPA Problems E18-11 Multiple Tax Rates
For the year ended December 31, 2016, Nelson Co's income statement showed income of $435,000 before income, tax expense. To Compute taxable income, the following differences were noted:
Income from tax-exempt municipal-$60,000
Depreciation deducted for tax purposes in excess of depreciation recorded on the books-120,000
Proceeds received from life insurance on death of an insured employee-$100,000
Corporate tax rate 2016 -30%
Enacted tax rate for future periods-35% REQUIRED:
1. Calculate taxable income and tax payable for tax purposes.
2. Prepare Nelson's income tax journal entry at the end of 2016.
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