Question: For the current quarter ( Q 1 ) , you have the following results in your current year earnings forecast. The Company classifies interest expense

For the current quarter (Q1), you have the following results in your current year earnings forecast. The Company classifies interest expense related to UTPs as income tax in the income statement. Forecasted income and effects: US domestic pre-tax income 10,000 non-US subsidiary pre-tax income (assume there are no foreign tax credits)4,000 Current year interest accrual for uncertain tax positions 400 This quarter there was a change in estimate on uncertain tax position for prior year (500) Non-deductible amount of business meals and entertainment 700 Tax rate =25% in both jurisdictions Year to date pre-tax income 5,000 What is the projected (forecasted) income used for interim reporting purposes? (Show your work!) What is the tax provision calculated for this interim period? (Show your work!) What amount of the total provision calculated above is a discrete expense/(benefit) in the quarter?

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