Prance, Inc., earns pretax book net income of $800,000 in 2018. Prance acquires a depreciable asset that

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Prance, Inc., earns pretax book net income of $800,000 in 2018. Prance acquires a depreciable asset that year, and first-year tax depreciation exceeds book depreciation by $80,000. Prance reported no other temporary or permanent book-tax differences. The relevant U.S. tax rate is 21%, and Prance earns an after-tax rate of return on capital of 8%. Compute Prance’s total income tax expense, current income tax expense, and deferred income tax expense.

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South-Western Federal Taxation 2019 Comprehensive

ISBN: 9781337703017

42th Edition

Authors: David M. Maloney, William A. Raabe, William H. Hoffman, James C. Young

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