Business, 30.03.2021 04:50 cymoneej

Chocolate Pie Company's taxable income and other data for 2020 are presented below: Taxable Income $500,000
Interest received on municipal bonds 55,000
Estimated bad debt expense (not written off) 30,000
Cash expenditures for warranties 98,000
Product warranty expense for accounting purposes 152,000
Gross profit on installment sales for 2020 170,000
Gross profit recognized for tax purposes
based on 2020 installment sales 150,000

Required:
a. Calculate 2020 pretax financial income.
b. For each item, explain why there is a difference if any exists,
between how it is treated for tax purposes and pretax financial income.

Answers: 3

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Chocolate Pie Company's taxable income and other data for 2020 are presented below: Taxable Income...