Bee Corp. prepared the following reconciliation between book income and taxable income for the year ended December 31, 20x0: Pretax accounting income 500,000 Taxable income 300,000 Difference 200,000 Interest on municipal bonds
Bee Corp. prepared the following reconciliation between book income and taxable income for the year ended December 31, 20x0:
|
Pretax accounting income |
500,000 |
|
Taxable income |
300,000 |
|
Difference |
200,000 |
|
Interest on municipal bonds |
50,000 |
|
Lower |
150,000 |
|
Total differences |
200,000 |
Bee's effective income tax rate for 20x0 is 30%. The depreciation difference will reverse equally over the next three years at enacted tax rates as follows:
Years Tax rates
20x1 30%
20x2 25%
20x3 25%
In Bee's 20x0 financial statements, the deferred portion of its provision for income taxes should be
-
40,000
-
50,000
-
45,000
-
60,000
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