Ramirez Corporation, Which Is Subject to Income Tax Only in State

question 128

Multiple Choice

Ramirez Corporation, which is subject to income tax only in State A, generated the following income and deductions: $\begin{array}{lr}\text { Federal taxable income } & \$ 500,000 \\\text { State A income tax expense } & 45,000 \\\text { Depreciation allowed for Federal tax purposes } & 300,000 \\\text { Depreciation allowed for state tax purposes } & 250,000\end{array}$ Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Ramirez's A taxable income is:

• A) $495,000
• B) $500,000
• C) $545,000
• D) $595,000

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Definitions:

Conversion Formula

A mathematical equation used to change one set of units to another.

Pounds

A unit of weight in the imperial system, used primarily in the United States, equivalent to 0.453592 kilograms.

Kilograms

A unit of mass in the metric system, widely used globally in science, industry, and medicine to measure body weight or substance amounts.

Conversion Formula

A mathematical equation used to change a measurement from one unit to another.