Pine Corp.’s books showed pretax income of $800,000 for the year ended December 31, 2006. In the computation of federal income taxes, the following data were considered:
Gain on an involuntary conversion |
$350,000 |
|
(Pine has elected to replace the property within the statutory period using total proceeds.) |
||
Depreciation deducted for the tax purposes in excess of depreciation deducted for book purposes |
50,000 |
|
Federal estimated tax payments, 2006 |
70,000 |
|
Enacted federal tax rates, 2006 |
30 |
% |
What amount should Pine report as its current federal income tax liability on its December 31, 2006 balance sheet?
- $ 50,000
- $ 65,000
- $120,000
- $135,000