10.00 points All of the accounts of the Grass is Greener Company have been adjus

Question

10.00 points All of the accounts of the Grass is Greener Company have been adjusted as of December 31, 2016, with he exception of income taxes incurred but not yet recorded. Those account balances appear below. All have normal balances. The estimated income tax rate for the company is 30%. Accounts Receivable nterest Receivable Prepaid Insurance Prepaid Rent 370,340 791,950 5,250 7,750 13,100 Equipment Accumulated Depreciation-Equipment Accounts Payable Unearned Revenue Income Tax Payable Salaries and Wages Payable Notes Payable (long-term) Long-Term Debt Common Stock Retained Earnings 691,500 144,100 300,700 93,100 29,100 375,040 248,600 403,400 222,600 23,800 961,000 133,100 Service Revenue Interest Revenue Supplies Expense Repairs and Maintenance Expense Depreciation Expense Rent Expense Income Tax Expense 263,100 61,550 32,400 Required: a. Calculate the income before income tax b. Calculate the income tax expense. 2

Explanation / Answer

Service Revenue 961000

Interest Revenue 133100

Less-

Supplies Expense 355200

Repair and maintenance expense 263100

Depreciation expense 61550

Rent Expense 32400

Income before Income Taxes 381850

b)

Income tax Expense = Income before Income Taxes * Rate of tax

= 381850 * 30%

= 114555

c) Net Income = Income before Income Taxes - Taxes

= 381850 - 114555

= 267295

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