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prisoha [69]
4 years ago
5

Woody Corp. had taxable income of $8,000 in the current year. The amount of MACRS depreciation was $3,000, while the amount of d

epreciation reported in the income statement was $1,000. Assuming no other differences between tax and accounting income, Woody's pretaxaccounting income was:
a.$ 5,000.
b.$ 6,000.
c.$10,000.
d.$11,000.
Business
1 answer:
irakobra [83]4 years ago
5 0

Answer:

c. $10,000

Explanation:

The computation of the  pretax accounting income is shown below:

= Taxable income + (Amount of MACRS depreciation - amount of depreciation reported in the income statement)

= $8,000 + ($3,000 - $1,000)

= $8,000 + $2,000

= $10,000

Simply we take the difference of depreciation and the difference is added to the taxable income so that the pre tax accounting income is shown below

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