Business, 23.10.2019 22:00 earthangel456
Mathis co. at the end of 2014, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: pretax financial income $ 800,000 estimated litigation expense 2,000,000 installment sales (1,600,000) taxable income $ 1,200,000 the estimated litigation expense of $2,000,000 will be deductible in 2016 when it is expected to be paid. the gross profit from the installment sales will be realized in the amount of $800,000 in each of the next two years. the estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $800,000 current and $800,000 noncurrent. the income tax rate is 30% for all years. 25. the income tax expense is
a. $240,000.
b. $360,000.
c. $400,000.
d. $800,000.
Answers: 2
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Mathis co. at the end of 2014, its first year of operations, prepared a reconciliation between preta...
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