Sand Engaged in Operations at the Start of 2015 and Reported

question 82

Multiple Choice

Sand engaged in operations at the start of 2015 and reported $550,000 in pre-tax book income for the year. Tax depreciation for Sand exceeded book depreciation by $50,000. The tax rate for 2015 was 30%, and Congress had enacted a tax rate of 20% for the years after 2015.
-If Sand paid no estimated taxes,what is the amount of income tax payable for Sand at the end of 2015?

• A)$40,000
• B)$45,000
• C)$100,000
• D)$150,000

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Definitions:

Trading Investments

Securities that are purchased by a firm primarily for the purpose of selling them in the near term to generate income.

Long-Term Investments

Financial assets intended to be held for more than a year, including stocks, bonds, and real estate, for generating revenue or appreciating in value over time.

Sale of Bonds

The process by which a company or government issues bonds to investors in order to raise capital, effectively borrowing from the bond purchasers.