Compute taxable income and income taxes payable

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Reference no: EM13903524

The Accent Corporation shows the following information.

On January 1, 2012, Accent purchased a donut machine for $900,000.

(a) Pretax financial income is $2,000,000 in 2012 and $2,500,000 in 2013.

(b) Taxable income is expected in future years with an expected tax rate of 40%.

(d) Tax-exempt municipal bonds yielded interest of $50,000 in 2013.

(e) Straight-line basis for 8 years for financial reporting (See Appendix 11A.)

(f) Half-year convention basis depreciation for 5 years for tax purposes.

Required:

(a) Compute taxable income and income taxes payable for 2013.

(b) Prepare the journal entries for income tax expense, income taxes payable, and deferred taxes for 2013.

Reference no: EM13903524

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