Reading 23: Income Taxes

Reading 23: Income Taxes

, Learning Outcome Statements
• Covered
• a, b, c, d, e, f, g, i


• Not Covered
• h, j

, Tax vs. Financial Reporting – I
• Tax reporting (thousands)

Sales €100,000
Less: Cost of Goods Sold (70,000)
Gross Profit €30,000
Less: SG&A (10,000)
Less: Depreciation (8,000)
Taxable Income €12,000
Income Tax Payable @ 30% (3,600)
Profit after Tax €8,400

, Tax vs. Financial Reporting – II
• Financial reporting (thousands)

Sales €100,000
Less: Cost of Goods Sold (70,000)
Gross Profit €30,000
Less: SG&A (10,000)
Less: Depreciation (5,000)
Plus: Asset Write-up 3,000
Accounting Profit €18,000
Tax Expense (5,400)
Net Income €12,600