Havaci Company reports pretax financial income of $80,000 for 2012. The following items cause taxable income to be different than pretax financial income.
Depreciation on the tax return is greater than depreciation on the income statement by $16,000.
Rent collected on the tax return is greater than rent earned on the income statement by $27,000.
Fines for pollution appear as an expense of $11,000 on the income statement.
Havaci's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2012.