Colson Corp. had pre-tax accounting income for the year of $500,000. Change in Accounts Receivable...
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Accounting
Colson Corp. had pre-tax accounting income for the year of $500,000. Change in Accounts Receivable (i.e. sales recorded not collected) of +$100,000. Depreciation Expense of $50,000 (compared to taxable expense of $100,000). Interest on Municipal Bonds of $20,000. A fine from the SEC for misreporting assets of $10,000. Rent of $75,000.
Prepare the M1 schedule (start with GAAP income, end with Taxable Income).
Note whether each item is temporary or permanent.
Record the income tax expense for the year. Create a DTA/DTL as necessary for each difference.
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