or the year ended Dec. 31, 201X, CACA Co. reported pre-tax financial income of 9,500,000. Its taxable income was 9,000,000. The difference is due to accelerated depreciation for income tax purposes. The income tax rate is 32% and CACA Co. made estimated tax payment during 201X

or the year ended Dec. 31, 201X, CACA Co. reported pre-tax financial income of 9,500,000. Its taxable income was 9,000,000. The difference is due to accelerated depreciation for income tax purposes. The income tax rate is 32% and CACA Co. made estimated tax payment during 201X

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 4BCRQ

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

For the year ended Dec. 31, 201X, CACA Co. reported pre-tax financial income of 9,500,000. Its taxable income was 9,000,000. The difference is due to accelerated depreciation for income tax purposes. The income tax rate is 32% and CACA Co. made estimated tax payment during 201X of 1,000,000. What should CACA Co. report as current tax expense for 201X?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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