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    pnorton's Avatar
    pnorton Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Jul 26, 2013, 07:44 AM
    I'm struggling on a question in class...
    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?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jul 26, 2013, 09:12 AM
    At least you were upfront about it being a homework question.

    Even though taxes is the primary issue here, this is more an accounting question, and I cannot help with that. Sorry!
    Wondergirl's Avatar
    Wondergirl Posts: 39,354, Reputation: 5431
    Jobs & Parenting Expert
    		  
    #3

    Jul 26, 2013, 09:18 AM
    >moved from Taxes to Homework->Finance & Accounting<
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