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Required information

Problem $6-77($LO $6-5)($Algo$)$

$[$The following information applies to the questions

displayed below.$]$

Hafnaoui Company reported pretax net income from

continuing operations of $$1,040,000$ and taxable income

of $$627,500.$ The book$-$tax difference of $$412,500$ was

due to a $$275,000$ favorable temporary difference

relating to depreciation, an unfavorable temporary

difference of $$110,000$ due to an increase in the reserve

for bad debts, and a $$247,500$ favorable permanent

difference from the receipt of life insurance proceeds. At

the end of the year, the reserve for bad debts had a

balance of $$137,500$; the beginning balance in the

account was $$27,500.$ Hafnaoui's beginning book $($tax$)$

basis in its fixed assets was $$1,030,000($$$845,000)$ and its

ending book $($tax$)$ basis is $$1,575,000($ $$1,115,000).$

Problem $6-77$ Part a $($Algo$)$

a$.$ Compute Hafnaoui Company's current income tax expense.