Question: a Calculating the amount of temporary and permanent differences and tax entry (LO 14-2, LO 14-4, LO 14-9) The following information pertains to Ramesh Company

a Calculating the amount of temporary and permanent differences and tax entry a

Calculating the amount of temporary and permanent differences and tax entry (LO 14-2, LO 14-4, LO 14-9) The following information pertains to Ramesh Company for 20X1: The company has one permanent difference and one temporary difference between book and taxable income. Required: 1. Calculate the amount of temporary difference for 20X1 and indicate whether it causes book income to be more or less than taxable income. 2. Calculate the amount of permanent difference for 20X1 and indicate whether it causes book income to be more or less than taxable income. 3. Provide the journal entry to record income tax expense for 20X1. 4. Compute the effective tax rate (that is, income tax expense divided by book income before taxes). Explain why this rate differs from the statutory tax rate of 21%

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