Grand Corporation reported pretax book income of $600,000. Tax depreciation exceeded book depreciation by $400,000. In addition, the company received $300,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $50,000. Grand's beginning book (tax) basis in its fixed assets was $2,000,000 ($1,800,000) and its ending book (tax) basis is $2,500,000 ($1,900,000). Compute the company's current income tax expense or benefit. Note: Leave no answer blank. Enter N/A or zero. Answer is complete but not entirely correct. Current income tax Deferred income tax N/A $ 0 expense $ 120,000 (
Grand Corporation reported pretax book income of $600,000. Tax depreciation exceeded book depreciation by $400,000. In addition, the company received $300,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $50,000. Grand's beginning book (tax) basis in its fixed assets was $2,000,000 ($1,800,000) and its ending book (tax) basis is $2,500,000 ($1,900,000). Compute the company's current income tax expense or benefit. Note: Leave no answer blank. Enter N/A or zero. Answer is complete but not entirely correct. Current income tax Deferred income tax N/A $ 0 expense $ 120,000 (
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 24CE
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Question
Transcribed Image Text:Grand Corporation reported pretax book income of $600,000. Tax depreciation exceeded book depreciation by $400,000. In
addition, the company received $300,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable
income of $50,000. Grand's beginning book (tax) basis in its fixed assets was $2,000,000 ($1,800,000) and its ending book (tax) basis
is $2,500,000 ($1,900,000). Compute the company's current income tax expense or benefit.
Note: Leave no answer blank. Enter N/A or zero.
Answer is complete but not entirely correct.
Current income tax
Deferred income tax
N/A
$
0
expense
$ 120,000 (
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