pnorton
Jul 26, 2013, 07:44 AM
I'm struggling on a question in class...
Co. Reported the following in 2012 (first year of operation) when tax rate is 30%; Congress has enacted a law stating that in 2013 tax rate will be 37%
Public Tax
Sales $700,000 $700,000
Municipal int. inc. 4,000 -0-
COGS Exp. (300,000) (380,000)
Depreciation Exp. (10,000) (8,000)
Warranty Exp. (7,000) (3,000)
Other Exp. (300,000) (300,000)
Inc. Before Tax $87,000
Taxable Income $1000
FASB requires that co. reconcile the statutory current year's tax rate (30%) to the effective tax rate (which is calculated as tax expense/income before taxes) shown on its public income statement.
Prepare that reconciliation for 2012 below:
Statutory tax rate: 30%
Effective tax rate: __%
Could anyone help me out here?
Co. Reported the following in 2012 (first year of operation) when tax rate is 30%; Congress has enacted a law stating that in 2013 tax rate will be 37%
Public Tax
Sales $700,000 $700,000
Municipal int. inc. 4,000 -0-
COGS Exp. (300,000) (380,000)
Depreciation Exp. (10,000) (8,000)
Warranty Exp. (7,000) (3,000)
Other Exp. (300,000) (300,000)
Inc. Before Tax $87,000
Taxable Income $1000
FASB requires that co. reconcile the statutory current year's tax rate (30%) to the effective tax rate (which is calculated as tax expense/income before taxes) shown on its public income statement.
Prepare that reconciliation for 2012 below:
Statutory tax rate: 30%
Effective tax rate: __%
Could anyone help me out here?