FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Cass Corporation reported pretax book income of $12,870,000. During the current year, the reserve for bad debts increased by
$285,000. In addition, tax depreciation exceeded book depreciation by $250,000. Cass Corporation sold a fixed asset and reported
book gain of $102,750 and tax gain of $136,500. Finally, the company received $343,000 of tax-exempt life insurance proceeds from
the death of one of its officers. Compute the company's current income tax expense or benefit.
Note: Round your final answer to nearest whole dollar amount. Amounts to be deducted should be indicated by a minus sign.
X Answer is complete but not entirely correct.
Pretax book income
Bad debt reserve
Depreciation
Fixed asset gain
Tax-exempt life insurance proceeds
Taxable income
Current income tax expense
$ 12,870,000
285,000
(250,000)
$
$
102,750 X
(343,000)
250,000 X
136,500 ×
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Transcribed Image Text:Cass Corporation reported pretax book income of $12,870,000. During the current year, the reserve for bad debts increased by $285,000. In addition, tax depreciation exceeded book depreciation by $250,000. Cass Corporation sold a fixed asset and reported book gain of $102,750 and tax gain of $136,500. Finally, the company received $343,000 of tax-exempt life insurance proceeds from the death of one of its officers. Compute the company's current income tax expense or benefit. Note: Round your final answer to nearest whole dollar amount. Amounts to be deducted should be indicated by a minus sign. X Answer is complete but not entirely correct. Pretax book income Bad debt reserve Depreciation Fixed asset gain Tax-exempt life insurance proceeds Taxable income Current income tax expense $ 12,870,000 285,000 (250,000) $ $ 102,750 X (343,000) 250,000 X 136,500 ×
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