Busy Corp. prepared the following reconciliation between pretax accounting income and taxable income for the year ended
Question:
Busy Corp. prepared the following reconciliation between pretax accounting income and taxable income for the year ended December 31:
Pretax accounting income | $ 250,000 |
Taxable income | 150,000 |
Difference | $ 100,000 |
| Analysis of difference: Interest on municipal bonds | 25,000 |
Excess of tax over book depreciation | 75,000 |
$ 100,000 |
Busy's current effective income tax rate is 30%. The depreciation difference will reverse in equal amounts over the next three years at an enacted tax rate of 21%.
In Busy's income statement, what amount should be reported as the current portion of its provision for income taxes?
Busy Corp. prepared the following reconciliation between pretax accounting income and taxable income for the year ended December 31:
Pretax accounting income | $ 250,000 |
Taxable income | 150,000 |
Difference | $ 100,000 |
| Analysis of difference: Interest on municipal bonds | 25,000 |
Excess of tax over book depreciation | 75,000 |
$ 100,000 |
Busy's current effective income tax rate is 30%. The depreciation difference will reverse in equal amounts over the next three years at an enacted tax rate of 21%.
In Busy's income statement, what amount should be reported as the current portion of its provision for income taxes?
Expert Answer:
To determine the current portion of Busy Corps provision for income taxes we need to calculate the t... View the full answer
