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Lerok [7]
3 years ago
13

Woody Corp. had taxable income of $8,000 in the current year. The amount of depreciation reported in the tax return was $3,000,

while the amount of depreciation reported in the income statement was $1,000. Assuming no other differences between tax and accounting income, Woody's pretax accounting income was:
Business
1 answer:
Ber [7]3 years ago
5 0

Answer:

$10,000

Explanation:

The temporary difference in depreciation = $3,000 - $1,000 = $2,000

This means that Woody's pretax accounting income = $8,000 + $2,000 = $10,000

Sometimes accounting methods under GAAP vary with the way the IRS determines the taxable income, e.g. bonus depreciation or 179 expense election. That is the reason why temporary differences result.

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leonid [27]

Answer:

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