ok guys, I should know this because its literally perm and temp. differences from REG. But somehow I forgot everything already. If I have tax depreciation in excess of book.. Why am I deducting it out of book income to get tax income??
Here is the question:
Dunn Co.'s income statement reported $90,000 income before provision for income taxes. To compute the provision for federal income taxes, the following data are provided:
Rent received in advance $ 16,000
Income from exempt municipal bonds 20,000
Depreciation deducted for income tax purposes in excess of depreciation reported for financial statement purposes 10,000
Enacted corporate income tax rate 30%
What amount of current income tax liability should be reported in Dunn's December 31 balance sheet?
I get everything up till the depreciation.. I understood it when I was studying REG just a month ago. LOL.