Haag corp.'s 2015 income statement showed pretax accounting income of $1,250,000. to compute the federal income tax liability, the following 2017 data were provided:

income from exempt municipal bonds $50,000
depreciation deducted for tax purposes in excess of depreciation
deducted for financial statement purposes $100,000
estimated federal income tax payments made $250,000
enacted corporate income tax rate 30%

what amount of current federal income tax liability should have been included in hagg's december 31, 2017, balance sheet?

$80,000
$110,000
$125,000
$330,000

$80,000

Explanation:

The taxable Income of the Haag Corp can be calculated using the following formula:

Taxable income=Pretax accounting income-income exempt for tax purposes-excess depreciation allowed for tax purposes.

Applying the above formula to the given question:

Pretax accounting income:                                                               $1,250,000

Income  from exempt municipal bond:                                              ($50,000)

Excess depreciation deducted for tax purposes                             ($100,000)

Taxable income                                                                                  $1,100,000

Tax on taxable income(30%*1,100,000)                                            $330,000

Less: Federal income tax already paid                                            ($250,000)  

Tax Liability to be included in Hagg's balance sheet                     $80,000

answer; bootstrapping is your answer;