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yan [13]
3 years ago
6

Grand River Corporation reported pretax book income of $700,000. Included in the computation were favorable temporary difference

s of $200,000, unfavorable temporary differences of $170,000, and favorable permanent differences of $200,000. The corporation's current income tax expense or benefit would be:
Business
1 answer:
Oliga [24]3 years ago
6 0

Answer:

The income subject to tax is 470,000

Income tax expense     105,000 debit

      Income tax payable         98,700 credit

      Income tax liability             6,300 credit

<u>DISCLAMER:</u>

We aren't given any tax-rate thus we calculate based on the 2020 tax for corporation which is 21%

Explanation:

The permanent difference will be ignored as they are permanent will not produce tax liability or tax assets in the future.

favorable temporary difference     200,000

unfavorable temporary difference (170,000)

net  favorable temporary difference 30,000

In the current period, the company will pay for a tax-base 30,000 less

but, in the future this difference will settle this, I will create a tax-liability

30,000 x 21% = 6,300

income subject to income tax:

book income                700,000

permanent difference (200,000)

accounting taxable income 500,000

temporary difference <u>   (30,000)</u>

Taxable Income            470,000

Income tax expense: 470,000 x 21% = 98,700

income tax expense: 500,000 x 21% = 105,000

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If a business is in need of working capital, one option is to use a(n) ________ that will buy the company's account receivables
vesna_86 [32]

Answer:

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5 0
3 years ago
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According to the liquidity premium theory of the term structure of interest rates, if the one-year bond rate is expected to be 4
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Answer:

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Explanation:

one-year bond rate expected = 4%, 5%, 6% for the next three years

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The interest rate on the a three year bond can be calculated as

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Answer:

d.$72 per machine hour

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What type of checking account charges a small fee for every check that clears the account?
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