Zeff Co. prepared the following reconciliation of its pretax financial
statement income to taxable income for the year ended December
31, year 1, its first year of operations:

Pretax financial income $160,000

Nontaxable interest received on municipal securities (5,000)

Long-term loss accrual in excess of deductible amount 10,000

Depreciation in excess of financial statement amount (25,000)

Taxable income $140,000

Zeff?s tax rate for year 1 is 40%.

In its year 1 income statement, what amount should Zeff
report as income tax expense?current portion?

$52,000
$56,000
$62,000
$64,000

Answer rating: 100% (QA)

The detailed answer for the above question is provided below b Income tax ... View the full answer