hard · Financial Accounting accounting-cycle-financial-statements
A firm reports a pretax book income of 400,000. It identifies the following items:20,000 in tax-exempt municipal bond interest; a 30,000 warranty accrual (expensed for book, not yet deductible for tax); and60,000 in accelerated tax depreciation in excess of book depreciation.
Using a statutory tax rate of 25%, what is the total income tax expense reported on the income statement?
- $87,500
- $92,500
- $95,000
- $100,000
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