Davis Company Began Manufacturing Operations on January 2, 2015 $$\begin{array} { l l } 2016 & \$ 7,500 \\2017 & \$ 2,500\end{array}$$

question 10

Multiple Choice

Davis Company began manufacturing operations on January 2, 2015. During 2015 Davis earned pre-tax book income of $85,000 and had taxable income of $75,000. Davis had a temporary difference relating to a prepaid asset that will be expensed as follows for book purposes:
$$\begin{array} { l l } 2016 & \$ 7,500 \\2017 & \$ 2,500\end{array}$$
-If Davis paid no estimated taxes,income tax payable at the end of 2015 is

• A)$22,500.
• B)$30,000.
• C)$36,000.
• D)$27,500.

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