Determine matrixs taxable income for the year 2015

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Question:

The Matrix Company began operations as of the beginningof 2015. During 2015, Matrix reported GAAP (book) income before taxes of $789,500. For income tax purposes, depreciation expense was $150,000; for GAAP (book) purposes, depreciation expense was $74,000. Matrix accrued $900,000 of revenue for GAAP (book) purposes during 2015; $600,000 of the accrued revenue was taxable during 2015. Matrix earned interest of $79,800 from a municipal bond investment during 2015. Matrix's marginal income tax rate is 40%. Matrix did not make any income tax payments during 2015.

a. Determine Matrix's taxable income for the year ended December 31, 2015.

b. Prepare the 2015 year-end journal entry to record income tax expense.

Reference no: EM13896817

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