Leer Corp.?s pretax income in year 1 was $100,000. The temporary differences between amounts reported in the

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Question:

Leer Corp.?s pretax income in year 1 was $100,000. The
temporary differences between amounts reported in the financial
statements and the tax return are as follows:

? Depreciation in the financial statements was $8,000
more than tax depreciation.

? The equity method of accounting resulted in financial
statement income of $35,000. A $25,000 dividend was
received during the year, which is eligible for the 80%
dividends received deduction.

Leer?s effective income tax rate was 30% in year 1. In its year 1
income statement, Leer should report a current provision for
income taxes of

$26,400
$23,400
$21,900
$18,600