Reference no: EM132578188
Berry Bhd reported Profit before tax of $7,900,000. The following information is provided for computation of taxable income:
(a) Book depreciation in excess of tax depreciation, $450,000
(b) Excess of income on installment sales over income reportable for tax purposes, $450,000
(c) Premium payment for life insurance policy on CEO, $200,000 non-deductible
(d) Rent collected in advance of period earned, $285,000
(e) Warranty provision accrued in advance of period paid, $80,000
(f) Interest revenue received on government bonds, $150,000, non-taxable
(g) Bad debts expense in excess of bad debts written off, $40,000
(h) Current tax rate is 25%
Required:
Question (a) Which of the above items are temporary and which are permanent differences?
Question (b) Determine the current tax payable for Berry Bhd.
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