Gotti Manufacturing Inc., a U.S.-based company, operates in three countries in addition to the United States. The following table reports the company's pretax income and the applicable tax rate in these countries for the year ended December 31, Year 1. Gotti does not have any temporary tax differences, but it does have two permanent differences: (1) nontaxable municipal bond interest of $20,000 in the United States and (2) nondeductible expenses of $5,000 in the United States.

Required:
Prepare the numerical reconciliation between tax expense and accounting profit that would appear in Gotti's income tax note in the Year 1 financial statements. Show two different ways in which this reconciliation may be presented.

Pre-tax Applicable Country United States Country One Country Two Country Three Total Permanent differences. Book income Income Tax Rate $1,450,000 400.000 500,000 600,000 . 2,950,000 15,000 S2,965,000 35% 40% 20% 25%