You have been assigned to compute the income tax provision for Tulip City Flowers Inc. (TCF) as of December 31, 2019. The company’s income statement for 2019 is provided below: (Leave no answer blank. Enter zero if applicable.)

Tulip City Flowers Inc. Statement of Operations at December 31, 2019

Net sales $ 20,000,000

Cost of sales 12,000,000

Gross profit $ 8,000,000

Compensation $ 500,000

Selling expenses 750,000

Depreciation and amortization 1,250,000

Other expenses 1,000,000

Total operating expenses $ 3,500,000

Income from operations $ 4,500,000

Interest and other income 25,000

Income before income taxes $ 4,525,000

You identified the following permanent differences:

Interest income from municipal bonds $ 10,000

Nondeductible stock compensation $ 5,000

Nondeductible fines $ 1,000

TCF prepared the following schedule of temporary differences from the beginning of the year to the end of the year:

Tulip City Flowers Inc. Temporary Difference Scheduling Template Taxable Temporary Differences BOY Deferred Taxes Current Year Change EOY Cumulative T/D EOY Deferred Taxes Accumulated depreciation $(1,050,000) $(500,000) $(5,500,000) $(1,155,000)

Deductible Temporary Differences BOY Deferred Taxes Current Year Change EOY Cumulative T/D EOY Deferred Taxes Allowance for bad debts $21,000 $10,000 $110,000 $23,100 Prepaid income 0 20,000 20,000 4,200

Deferred compensation 10,500 10,000 60,000 12,600

Accrued pension liabilities 105,000 100,000 600,000 126,000

Total $136,500 $140,000 $790,000 $165,900

_{Required: Compute TCF’s current income tax expense or benefit for 2019.}

Compute TCF’s deferred income tax expense or benefit for 2019.

Prepare a reconciliation of TCF’s total income tax provision with its hypothetical income tax expense of 21 percent in both dollars and rates.

 

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a. Compute TCF's current income tax expense or benefit for 2019. b. Compute TCF's deferred income tax expense or benefit for 2019. Current income tax expense $ 873,810 а. b. Total income tax provision $ 949,410 a. Compute TCF's current income tax expense or benefit for 2019. b. Compute TCF's deferred income tax expense or benefit for 2019. Current income tax expense $ 873,810 а. b. Total income tax provision $ 949,410

Answer rating: 100% (QA)

Answer Solution Part A Current income tax expense or benefit for 2019 Income before income taxes 452... View the full answer