Reference no: EM131815050

Question - At the beginning of 2012, Barbara, Inc. has a deferred tax asset of $8,000 and deferred tax liability of $6,500. In 2012, pretax financial income was $600,000 and the tax rate was 35%.

Pretax income included:

Interest income from municipal bonds $25,000

Accrued warranty costs, estimated to be used in 2013 $74,000

Prepaid rent expense, will be used in 2013 $16,000

Installment sales revenue, to be collected in 2013 $45,000

Operating loss carry forward $36,000

What is taxable income for 2012?

$796,000

$650,500

$600,000

$552,000