NotesCh5.pdf

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Calculation of Net Income for Tax Purposes
- All corporations have a financial statement prepared
for accounting purposes using Generally Accepted
Accounting Principles
- This accounting statement must be adjusted to be in
accordance with income tax rules. This is adjusted as
follows:
Net Income per Accounting Statement
Add: Non-deductible expenses
Add: Additional taxable income
Deduct: Additional tax-deductible expenses
Deduct: Accounting Income which is not taxable
= Net Income for Tax Purposes
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