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14 January, 12:39

Jones company reported pretax book income of $400,000. included in the computation were favorable temporary differences of $50,000, unfavorable temporary difference of $20,000, and favorale permanent differences of $40,000. book equivalent of taxable income is:

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  1. T
    14 January, 16:01
    0
    In this case, the book value of taxable income would simply be the difference in pretax book income and favorable permanent differences. That is:

    Taxable income = Pretax book income - Favorable permanent differences

    Taxable income = $400,000 - $40,000

    Taxable income = $360,000
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