For the year ended December 31, 20X1, Mont Co.'s books showed income of $600,000 before the provision for income tax expense. To compute taxable income for federal income tax purposes, the following items should be noted:

Income from exempt municipal bonds	$60,000
Depreciation deducted for tax purposes in excess of depreciation recorded on the books	$120,000
Proceeds received from life insurance on death of officer	$100,000
Estimated tax payments	$0
Enacted corporate tax rate	30%

Ignoring the alternative minimum tax provisions, what amount should Mont report at December 31, 20X1, as its current federal income tax liability?

a. $114,000

b. $150,000

c. $162,000

d. $96,000

For the year ended December 31, 2015, Pering Co. reported a pretax financial income of $550,000. Its current tax expense was $144,000. Pering reported a difference between pretax financial statement income and taxable income. This difference is due to accelerated depreciation for income tax purposes. Pering’s effective income tax rate is 30% and Pering made estimated tax payments during 2015 of $75,000. What amount did Paring report as taxable income for 2015?

a. $405,000

b. $475,000

c. $480,000

d. $550,000

Answer rating: 100% (QA)

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