A student with a high academic score
Your answer to question 1: is A
Your answer to question 2: is B
Answer:
Baltimore Inc.
a. Total taxable income = $47,200
b. Income tax payable = $11,800
c. Income tax expense = $11,250
d. Net income = $33,750
Explanation:
a) Data and Calculations:
GAAP determined pretax income = $45,000
Add nondeductible fines 5,000
Less exempt municipal interest revenue 2,800
Total taxable income $47,200
Income tax (25%) 11,800
Income tax expense:
GAAP determined pretax income = $45,000
Income tax (25%) 11,250
Net income $33,750
b) The differences between the GAAP determined pretax income and the tax determined taxable income are due to permanent differences (not temporary). This implies that there are no deferred tax assets and liabilities and no recoveries from deferred taxes. However, in reporting its financial performance for the year, Baltimore Inc. still has to comply with the GAAP rules and not the tax rules.
Answer:
April May June
Cash Sales 30% $157,500 $160,500 $168,000
Sales on account 70% <u>$367,500</u> <u>$374,500</u> <u>$392,000</u>
<u>$525,000</u> <u>$535,000</u> <u>$560,000</u>
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JASPER COMPANY
Cash Receipts Budget
For April, May and June
April May June
<em>Cash Receipts from:</em>
Cash Sales $157,500 $160,500 $168,000
Collection of accounts Receivable <u><em>$400,000 $367,500 $374,500</em></u>
Total Cash Receipts <u>$557,500</u> <u>$528,000</u> <u>$542,500</u>
