Problem $3-13($LO$.1,3)$

Prance, Inc., earned pretax book net income of $$800,000$ in $2021.$ Prance acquired a depreciable asset that year, and first$-$year tax

depreciation exceeded book depreciation by $$80,000.$ Prance reported no other temporary or permanent book$-$tax differences. The

pertinent U$.$S$.$ Federal corporate income tax rate is $21\%$ and Prance earned an after$-$tax rate of return on capital of $4\%.$

Compute Prance's current income tax benefit or expense for the year.

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The deferred component of the book$-$tax expense is called the deferred tax expense or deferred tax benefit. This component represents the future

tax cost $($or savings$)$ connected with income reported in the current$-$period financial statement.