Question 8 Sarasota financial income for Lake Inc. is $280,000, and its taxable

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Question 8
Sarasota financial income for Lake Inc. is $280,000, and its taxable income is $120,000 for 2018. Its only temporary difference at the end of the period relates to a $50,000 difference due to excess depreciation for tax purposes. If the tax rate is 41% for all periods, compute the amount of income tax expense to report in 2018. No deferred income taxes existed at the beginning of the year.
Income tax expense $

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Question 8 Sarasota financial income for Lake Inc. is $280,000, and its taxable income is 120,000 for 2018. Its only temporary difference at the end of the period relates to a $50,000 difference due to excess depreciation for tax purposes. If the tax rate is 41% for all periods, compute the amount of income tax expense to report in 2018. No deferred income taxes existed at the beginning of the year. Income tax expense Click if you would like to Show Work for this question

Explanation / Answer

Incomde tax expense is calculated on taxable income:

41% of Taxable income = 41% of $120,000 = $49,200

Income Tax Expense = $49,200

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