Belmond 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. Belmond does not have any temporary tax differences, but it does have two permanent differences: (1) nontaxable municipal bond interest of $70,000 in the United States and (2) nondeductible expenses of $30,000 in the United States. 

Required: 

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

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Pretax Applicable Country Income Tax Rate United States $1,450,000 21% Country One 1,000,000 30 Country Two 400,000 20 Country Three 310,000 15 Total ..... $3,160,000 Permanent differences 40,000 Вook income $3,200,000